Almost 70 percent of Indian automobile sales or USD 40 billion is likely to be digitally influenced by the 2020, as compared with USD 18 billion today notes the Bain & Company and Facebook report.
According to the 'Changing Gears 2020: How Digital is Transforming the Face of the Automotive Industry' report, the impact of digital technologies on the automotive industry, finds that digital engineering, 3D printing, smart sensors and the Internet of Things (IoT) will disrupt auto R&D, manufacturing, sales, marketing and after-sales services.
Social media will influence about 40 percent of sales valued at USD 23 billion by 2020, up from 20 percent of sales today.
The report collated responses from 1551 Indian customers who had purchased a vehicle in the last 12 months and surveyed their purchase influencers. This was supplemented with a survey of 87 dealers and conversations with top management teams across automakers.
The report also drew insights from Bain's Global Automotive Consumer Survey that included respondents from the US, the UK, Germany, China and India.
"Players from outside the traditional auto industry are witnessing rapid growth world over. It is important to evolve the business model to tap into shifting profit pools," said Managing Director at Bain and Company India, Karan Singh.
On the other hand, Yaquta Mandviwala from Partner at Bain and Company believes that India is likely to witness digital leapfrogging given consumers' openness to new technologies.
"To remain relevant companies will need to keep up with the changing customer behaviour, differentiate the retail format into brand experience centres, use product digitization to create deeper ongoing relationships and invest in a strong analytics backbone," added Mandviwala.
The report also explores auto customers' changing mindsets and attitudes towards mobility. The report reveals that the nature of the game is changing.
Apart from the fight for the consumer, it also referred to the fight for relevance as new business models compete for attention.
More than 40 percent of lead consumers report using app-based taxi services like Ola and Uber more than three or four times per week and further headroom for growth exists.
"Technology is transforming the automobile industry in un-imaginable ways and this report discusses quite a few insights," said MD Facebook India, Umang Bedi.
He further said that digital has struck the automotive world with lightning speed and this transition to digital is only going to accelerate, today's ideas go from drawing board to production in months rather than decades.
"All this advancement and focus on digital will deepen relationships between customers and auto manufacturers," added Bedi.
The report enlists five critical imperatives for auto OEMs to consider in this new competitive landscape. It called for evolving business models to tap into shifting profit pools, radically changing the investment mix to follow the customer online, differentiating the retail format, using product digitisation to create deeper ongoing customer relationships and building the data and analytics backbone to enable a meaningful use of digital.
However, as per Bain's Global Automotive Survey, Indian and Chinese consumers have depicted a greater willingness to shift multiple parts of their purchases online, compared with their peers in the US, the UK and Germany. (ANI)
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