There is, in India, a certain eagerness about the upcoming Union Budget. This holds particularly true for high growth market segments such as the online automobile industry. Spurred by the evolving consumer choices and greater purchasing power, the industry has witnessed a massive growth over the past few years. While the leading players in the industry have already spoken out about their concerns and possible measures that the government can implement to facilitate business growth, it is equally important to know what the Indian consumers expect from the upcoming budget as far as vehicles are concerned. Keeping that in mind, CarDekho recently conducted a survey across India. A total of 2050 users from metropolitan cities like Delhi-NCR, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata as well as other geographies were surveyed. When the users were asked to list their top two budget priorities, the results were astounding to say the least.
Overall scenario ‘Investment on infrastructure’ was amongst the top priorities of the country’s automobile consumer base; nearly 55% of the surveyed individuals thought the current infrastructure was inadequate and wanted better and cleaner roads, while 19% demanded more budget allocation for developing the infrastructure. The denizens of the Garden City of Bangalore were most dissatisfied; only 32% thought the current infrastructure is adequate. Chennai came a close second with 34% thinking the existing infrastructure was satisfactory.
There also seemed to be a growing inclination towards adopting environment-friendly measures as the consumers sought to shift towards cleaner fuels. More sops on electric/hybrid vehicles was a prime expectation from the upcoming Union Budget across the country, even as the preference for diesel cars suffered a steep fall. Nearly 70% Indian consumers said they would opt for electric/hybrid vehicles if more sops were given, with Hyderabad leading the line with 78% in favour. In comparison, only 55% consumers from Chennai were pro-alternate fuel powered vehicles.
Interestingly, it was noticed that individuals who intended to buy petrol or diesel cars in the near future wanted more subsidies on fuel and a reduction in taxes for vehicle purchase, while people who wanted to purchase alternate fuel-driven vehicles were looking for more sops on electric/hybrid vehicles and wanted the government to promote adoption of public transport. The Delhi consumers were looking for more environmental friendly measures, while Mumbai consumers showed an inclination towards more fuel subsidies. The Delhiites were also more eager to see the GST bill implemented than the Mumbaikars. There was also an expectation to devise more complex tax norms in the upcoming budget. While the consumers preferred not to raise taxes on bikes and cars – only 2% metro users and 3% users from the rest of India were in favour of more taxes – there was a definite sentiment for raising taxes on larger vehicles, with 9% of the total surveyed wanting a push for such a measure. Other expectations from the budget included a push towards ‘One Family, One Car’ to reduce the traffic congestion and pollution in metro cities, while there were also calls for sterner measures such as discontinuation of old vehicles and encouraging the usage of two-wheelers/bicycles for shorter distances.
Environment-friendly measures preferred
The survey also generated some other very interesting results when it came to the environment and the impact of consumer preferences. Owing to the recent environmental concerns, the overall focus was on reducing the pollution quotient and opting more environment-friendly measures.
Consider Delhi-NCR, for instance. Vehemently opposed to the ‘odd-even rule’ when it was first implemented, the city’s stance towards the rule has since mellowed owing to the dip in the traffic and pollution during the pilot phase. Nearly 11% of the surveyed consumers wanted the government to push for implementing the ‘odd-even rule’ on a permanent basis to cut down on the city’s high pollution quotient. In comparison, Mumbai showed low enthusiasm for the ‘odd-even’ implementation with only 7% in favour of such a move. The nationwide response to the rule was also lukewarm. Only 8% of the target audience in the metros and 6% in the rest of India wanted ‘odd-even’ to be implemented on a permanent basis.
The consumers were also looking for more sops on using electric/hybrid vehicles. In Mumbai, 17% of the interviewed population wanted more sops on electric/hybrid vehicles, while Delhi followed closely with 16% wanting similar policies. Countrywide responses followed the same pattern, with 17% users in metros and 19% in the rest of India voicing a preference for more sops on EVs and hybrid vehicles. Delhi also led the way when it came to restricting movement of commercial vehicles in the city, with 11% asking for policies to address the concern. Moreover, there were also a demand for restricted movement of commercial vehicles within the city (11%) and a ban on diesel engines over a certain limit (10%). Similar expectations were observed for the rest of India.
There was a tangible push for adopting cleaner fuels such as CNG and LPG. Nearly 18% in Delhi opted for policies addressing these concerns, while Mumbai led the way with 23% in favour of the measure. Metros and the rest of India were also heavily inclined towards cleaner fuels, with 20% of the surveyed population favouring the push. Tighter emission norms were also a priority for the consumers.
In the face of the changing consumer preferences, the demand for diesel vehicles took a massive hit. Extremely high on the consumer wish list during the pre-festive season (October’15), diesel vehicles saw a steep fall in demand across all cities as the consumers opted for more environment friendly alternatives such as CNG and LPG vehicles. All India demand fell from 50% to 24% with Hyderabad seeing the maximum drop in demand; the number of consumers wanting to buy diesel vehicles dropped from 71% during the festive season to 24%.
Summary Driven by the need to reduce the load on the environment, the consumers expect several measures to be outlined in the Union Budget 2016. As mentioned above, there is an expectation from the government to promote EVs/hybrid vehicles through more and better sops as well as laying the groundwork for a better public transportation infrastructure. Consumers expected a push for smaller cars, while the larger vehicles, particularly diesel driven cars, could be restricted. Road infrastructure is a chief concern that consumer need addressal on, while a move for tighter emission norms was also expected. As such, the upcoming budget is likely to have concessions regarding the improvement of road and public transport, while incentives are also most likely to be given for using smaller vehicles as well as EVs/Hybrid vehicles.
