Auto brands ride the digital wave
With smartphone snow replacing in-person research when buying cars or bikes, the digital medium will become key for advertising, sales and marketing
It is not only consumer goods, retail or banking and financial services that is seeing the influx of digital in the purchase process. Automotive brands today are increasingly finding consumers coming to them via the digital route, prompting them to pay attention to the medium closely.
To put things in perspective, a recent report by GoogleKantar TNS says that 96 per cent of buyers in India use search when purchasing a car or bike. The smartphone, it says, has rapidly replaced inperson research, pointing to how hard-pressed people are for time in today’s day and age.
The study also says that offline touchpoints have dropped by 50 per cent for consumers in the auto buying process, indicating that the pressure to go digital is only growing for companies in the space. In fact, a 2017 Bain & Company study said that almost 70 per cent of annual auto sales in India and the rest of the world would be digitally influenced. This is an almost 2.3 times increase over a threeyear period, which is substantial, the study said.
The Bain report also highlights that younger consumers under the age of 35 would drive the digital wave with 49 per cent already counting on the net for reviews, insights and brand options. As this consumer gets older, a newer lot would replace them, the study said, implying that digital usage would not quell at all. In fact, it was only slated to grow as mobile phones emerged as the front-runners in digital engagement across categories in India.
A February 2018 study by the Internet and Mobile Association of India and Kantar IMRB said that the number of online users was expected to reach 500 million by June this year, implying that using digital as the primary medium for brand-building, lead generation and hard sales would only increase for companies across the corporate spectrum.
While auto brands are taking note of the digital influence on purchase decisions , experts tracking the market said that more work needed to be done if they wished to be ahead of the curve. Online ad spends for domestic auto majors currently is estimated to be in the region of 10-11 per cent of their total ad budgets. Experts say this number would have to double if auto brands had to be of consequence on the internet.
The country’s secondlargest car maker Hyundai says that its digital ad budget is already in the region of 20 per cent and this number may go up as online influence grows.
“We are present across digital touch points including dealer websites. These help us in regional penetration and in promoting local offers,” Puneet Anand, senior general manager and group head, marketing, Hyundai Motor India said.
Anand also claims that Hyundai has a broader footprint on social media including 10.4 million fans on Facebook, 0.99 million followers on Twitter and 189 million views on YouTube to help reach out to digital natives. But the question is: Are other auto brands far behind?
A Honda Cars India spokesperson, for instance, said that digital contribution to total sales for the company had doubled to 15 per cent in the last two years, led by higher spends online. The spokesperson also said that around 70 per cent of its customers were coming to Honda showrooms after first reading about its brands on the internet, pointing to a clear shift in primary research priorities.
Experts say that marking one's presence on social media would be par for the course for most auto companies, pushing them to raise the bar even further in the coming months.
Peter MacKenzie, MD, India and Greater China, Harley Davidson, echoes this view, adding that digital will have to become more experiential in nature for auto brands to attract consumers online. While the offline touch and feel can never be replaced in auto, AI-powered tech and augmented as well as virtual reality could come to the rescue, he said, adding that his company was exploring these options to lure consumers to its brand.
Though digital adoption by auto majors has been slower than categories such as consumer goods, retail or even media and entertainment, that could change in the future with sustained effort by auto companies in the space.
Segments such as education and real estate in recent years have emerged as big players on digital despite the purchase and investment cycle being fairly long and the offline leg, like in auto, being significant. This, say experts, could act as a trigger for auto companies to push the peddle on investment in digital. given that they share similar attributes with the above segments.
Aniruddha Haldar, vice president, marketing, commuter motorcycles, scooters and corporate brand, TVS Motor Company, said he saw the digital medium exert significant influence, prompting firms to completely overhaul their go-to-market strategies in the future. “We see the medium being more influential to younger consumers. We also see it play a role bigger than information dissemination and lead generation,” he said.
Auto brands while taking note of the growing digital influence would need to put in more effort if they wish to be ahead of the purchase curve