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The Road to Digital in India's Automotive Industry

Bain Partner Yaquta Mandviwala explains how Indian OEMs can increase overall digital presence to strengthen their relationships with customers.

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The Road to Digital in India's Automotive Industry
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Although many of India's consumers are mobile first, most OEMs have not reacted to this transition. Yaquta Mandviwala, a partner with Bain’s Customer Strategy & Marketing practice, explains how these companies can pivot their marketing and customer experience strategies to engage with existing consumers and prospective buyers. 

Read the Bain Brief: Changing Gears 2020: How Digital Is Transforming the Face of the Automotive Industry

Read the transcript below.

YAQUTA MANDVIWALA: Why will digital disrupt the Indian auto sector? For starters, let me share with you a few trends that we're noticing in India. One is 90% of India's consumers are mobile first. They like to engage through voice, video and vernacular. Second, 70% of purchases, vehicle purchases, in India are likely to be digitally influenced in the next couple of years. And third, not only will 70% of these purchases be digitally influenced, 50% of them would have decided not only the brand, but also the model that they want to buy, even before entering the dealership.

But physical is still here to stay, so people will still walk into their dealerships to buy their vehicles. It's just that most of the research that they would have done offline earlier is now done online. Now what does this mean for India's OEMs? What are the imperatives? First is that we need to make sure that we're following the money, right? So other business models have taken root -- Ola, Uber, the app aggregators have come into play -- and being able to get a piece of that action is going to be very important. So targeted partnerships with the right kind of players is probably a great idea.

The second is follow the consumer. If people are researching most of this online, the marketing money also needs to follow that, right? So the investment mix, digital needs to be a large share of the investment mix. Today, it is only 10% to 12%. We need to make this much higher. The third is that the retail format is now going to be more of an experience center than just a place for people to come and buy their vehicle, and so virtual engagement with the consumer or Avi, those kind of formats, will really need to take root. You could even think of having a dealership in a mall, right, where people come more for the experience than for actually buying the vehicle.

The fourth, I would say, is really about product digitization. Imagine the kind of information that one could have access to based on the usage of the consumer. Emergency services that one can provide based on the location of the vehicle, information regarding the vehicle health can, you know, come into play when you're deciding the insurance on the vehicle, a bunch of stuff can be done to create that intimacy with the consumer, which was otherwise far removed.

And the last, I would say, is a clear investment in data and analytics. The amount of data that is available online -- social media, other channels -- marrying all of those different forms of data and getting the right view of the consumer is just going to be so possible in the future. It's the segment of one, and it's here to stay. So just to wrap up, what I would say is that digital is an important area. It's a great way for us to engage with the consumer. There are clear imperatives for us. It's not an afterthought. It needs to be brought more front and center, and it needs to be part of the core strategy for most companies today.

Related Report

Changing Gears 2020: How Digital is Transforming the Face of the Automotive Industry

How digital is transforming the face of the automotive industry.

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