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Consumer Buying Behaviour of Cars in India - A Survey

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 st
1 International Conference on New Frontiers in Engineering, Science & Technology,
New Delhi, India, January 8-12, 2018

NFEST/2018/R–115

Consumer Buying Behaviour of Cars in India - A Survey

Dhruv Mathur1, Avdesh Bhardawaj2, Aditi Pandey3, Ashish Oberoi4, Divya Rani5
1,3,4,5
School of Management, The NorthCap University Gurugram, Haryana-122017 India
2
Department of Civil Engineering, Indian Institute of Technology Delhi, New Delhi-110016 India
1
dhruvmathur5@gmail.com

Abstract: The automobile industry of India is one of the
largest in the world and growing steadily each year. With
the ease of availability of automobile loans, therise in
salary structures and higher buying capacity of the middle
income class, there has been a spurt in cars plying on
roads. The present paper indulges in studying the buying
behavior of cars in India. Apart from the literature review
of the concurrent facts and figures, a questionnaire survey
was conducted to understand the various factors that
influence the decision in purchasing cars in India. A
questionnaire survey was designed in Google forms and
sent to people using different tools like e-mail, WhatsApp,
Facebook, etc. For those who were not well versant with
these tools a hard copy of thequestionnaire was provided to
them for filling up. The results of the survey were analyzed
statistically and are presented here.
Keywords: buying behavior; automobile; questionnaire
survey; social media
1. INTRODUCTION
Some of the previous studies done in various zones in India
like West Haryana [5], New Delhi [6], Jaipur [7] and Kerala
[8] on car purchasing behavior have reported changing
trends as per changing times as also the effect of
multinationals on the Indian automobile market. Most
studies have reported the advent of newer technology as the
biggest decision maker in this aspect. Whereas Television
advertising is amongst the biggest influencers [9] other
medium like word of mouth, magazines and ratings also
have their weightage. Some research have studied factors
like family needs, fuel efficiency, pricing, safety and social
status as important in automobile buying behavior of the
consumer [10] whereas others have also focused on value
for money [11], affordability [12] and brand personality
alongwith the impact of manufacturer’s websites in this
decision making process [13]. The husbands in families
have been found to be major decision makers while
purchase of cars [14].
TABLE 1: Automobile Production Trends in
India from 2011 – 2017

The automobile industry of India is one of the largest in the Year Passenger vehicle Passenger vehicle
world, contributing 7.1% to the Gross Domestic Product production domestic sales
(GDP)[1]. As a person moves up the ladder in his income, 2011-12 31, 46, 069 26, 29, 839
his/her first priority is to buy a car. It is becoming more of a 2012-13 32, 31, 058 26, 65, 015
necessity nowadays to own a car than a luxury. Presently, a
2013-14 30, 87, 973 25, 03, 509
100% Foreign Direct Investment (FDI) is allowed in this
area meaning the foreign investors do not need any prior 2014-15 32, 21, 419 26, 01, 236
permission from the government of India. The sales of 2015-16 34, 65, 045 27, 89, 208
private vehicles grew by 9.17% commercial vehicles by 2016-17 37, 91, 540 30, 46, 727
3.03% and 2 wheelers by 8.29% during the period April-
January 2017[2]. During the financial year 2016-17 a total In today’s world, consumers do not only consider engine
of 37, 91, 540 units of passenger vehicles; 8, 10, 286 units performance as a major factor. They look for those
of commercial vehicles; 7, 83, 149 units of three-wheelers differentiating parameters, through which they can make
and 1, 99, 29, 485 units of two-wheelers were produced as the choice from one brand to another. As stated by financial
shown in table 1 [3]. The world standing for the Indian time, India has become fifth largest passenger vehicle
automobile sector, as per the Confederation of the Indian market, after China, US, Japan, and Germany. The sale of
industry is the largest three-wheeler market, second largest passenger vehicles too grew 9.24% to 3.04 million during
two-wheeler market, tenth largest passenger car market, 2016-17, the fastest growth rate seen since 2010-11, when
fourth largest tractor market, fifth largest commercial they grew 28.2%.[16].
vehicle market and fifth largest bus and truck segment. In
India, a total of Rs. 92, 218.42 crore or 5.02% of the total With the dynamic international norms as regards to both
FDI inflows in India, from April 2000 to March 2017 has business and environmental protection, the car industry has
been towards the automobile industry[4]. to keep pace with the changing scenarios. There has been a

ISBN: 978-93-86238-41-2 ♦ 468 ♦

 Consumer Buying Behaviour of Cars in India - A Survey

shift towards automated and electronically controlled cars. 2. METHODOLOGY

This has been brought about by ambient intelligence
The methodology adopted for this paper (Fig. 1) consisted
systems [17] and manufacturers must keep this in mind
of first an extensive literature review of the facts and
while designing future cars. The increasing
asing competition
figures influencing car buying behavior and trends in India.
among car manufacturers also means that they have to keep
Then a questionnaire survey was designed to know the
a lot of data regarding consumer preferences and
current preferences and decision influencing factors for car
incorporate findings of past marketing research. This big
buying in India. The questionnaire
stionnaire was designed on Google
data management surely will help them in analyzing the
forms and sent to likely respondents through various modes
consumer preferencee trends and design future strategies
like social media (WhatsApp, Facebook,
Facebook etc.), e-mail, and
[18].
distribution of hardcopies.. The responses so received were
The present paper is intended to find outcurrentpreferences analyzed and the results are discussed in this paper.
of car buying behavior among the consumers and analyze
the rationale behind them.

Fig. 1. Methodology diagram

3. RESULTS
Majority of the respondents (82.50%) in the survey were aged between 18
18-25, followed by 7.8% being aged between 25-35
25
and 9.55% is above the age of 35 (Fig. 2). Whereas 77% were students
students, the rest were working professionals,
professionals home makers
and retired people (Fig. 3).
100.00% Age Groups

82.50%
50.00%

Number of Responses
7.80% 3.55% 4% 1.70% 0.30%
0.00%
18-25 25-35 35-45 45-55 55-65 65+

Fig. 2. Age Groups of the respondents

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1 International Conference on New Frontiers in Engineering, Science & Technology, New Delhi, India, Jan 8-12,
8 2018 ♦ 469 ♦
 Consumer Buying Behaviour of Cars in India - A Survey

Home Maker 0.70% Occupation

Retired 1.20%
Working Professional 21%
Student 77% Number of Responses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Fig. 3. Occupation of the Respondents

Income Group
40.00% 29.10% 25% 28.20%
17.70%
20.00% Income Group

0.00%
₹50,000 - ₹1,00,000 - ₹5,00,000 - ₹10,00,000 +
₹1,00,000 ₹5,00,000 ₹10,00,000

Fig. 4. Respondents Family Income

Figure
ure 4 illustrates the income group of the respondent’s family income. Most of the respondents belong to the income group
Rs. 100000-500000
500000 per annum. 28.20% of them earn more than Rs 100000 per annum. 25% belong to the income group
Rs.500000-1000000.
Aroundd 40.98% of the people in the survey did not own a car (Fig. 5). The percentage of people owning 1 car in the family
was 31.65% and 27% of the respondents own 2 and more cars in the family.

Family Ownership of Cars

1
31.65%
40.98% 2

3+

4.27% 18.40%
None
4.41%

Fig. 5. Family ownership of cars.

With a figure of 61%, Sedan iss the most preferred car among the respondents (Fig. 6)
6), followed by SUV and Hatchback.
MUV is the least preferred car type (6.40%). Out of the total respondents
respondents, the brand preference (Fig 7) is as follows -
Maruti(16.50%), Hyundai(13.40%), Honda(14%)
Honda(14%), Toyota(11%), Mahindra(5.70%), Tata(3%),Tata(3%) Volkswagen(11.20%),
Nissan(5.30%), Ford(8.20%), Renault(4%),, Skoda(6.20%), BMW(0.5%), Audi(0.5%) and Mercedes(0.3%).

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 Consumer
er Buying Behaviour of Cars in India - A Survey

Type of Car
70.00%

60.00%
61%
58.20%
50.00%

40.00%

30.00%
32.70%
20.00%

10.00%

0.00% 6.40%
Hatchback Sedan SUV MUV

Fig. 6. Type of Car preferred by the Respondents

Brand Preference

Mercedes 0.30%

Audi 0.50%

BMW 0.50%
Skoda 6.20%

Renault 4%

Ford 8.20%

Nissan 5.30%
Volkswagen 11.20% Brand Preference
Tata 3%

Mahindra 5.70%

Toyota 11%
Honda 14%
Hyundai 13.40%
Maruti 16.50%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00%

Fig.7. Brands Preferred by the Respondents

Most off the people (37.50%) are satisfied with either of the two engines
engines-petrol
petrol or diesel (Fig. 8). The second most preferred
engine type is petrol with 31.10% and 25.50% people prefer a diesel engine. The least preferred is electric engine. Figure 9
illustrates the effect of brand image on the buying behaviour of the respondents. Majority of them are affected by the brand
image before they finalize their buying decision. They are also influenced by the advertising of the cars and the features that
th
are displayed in them.

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1 International Conference on New Frontiers in Engineering, Science & Technology, New Delhi, India, Jan 8-12,
8 2018 ♦ 471 ♦
 Consumer Buying Behaviour of Cars in India - A Survey

Type of Engine

40.00%

30.00%

20.00% 31.10%
25.50% 37.50%
10.00% Type of engine

0.00%
Petrol 6%
Diesel
Petrol or Diesel
Electric

Fig. 8. Engine preferred by the respondents

Impact of Brand Image

No 120

Brand image

Yes 695

0 100 200 300 400 500 600 700

Fig. 9. Impact of Brand Image

4. CONCLUSION REFERENCES
It can be concluded that the buying behavior of cars is [1]
influenced by type and brand image of the cars and
manufacturers. So it is imperative for them to maintain their [2]
brand images. Technically the engine type and efficiency
whereas good advertising with detailed features are the [3]
dominant factors that influence the potential car customers.
The manufacturers must keep these things in mind while [4]
planning the manufacturing and marketing of their cars.
ACKNOWLEDGEMENTS [5]
The authors wish to acknowledge the time and contribution
of all the questionnaire surveyrespondents without whom [6]
this paper would not have been possible.
http://dipp.nic.in/sites/default/files/FDI_FactSheet_J
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