Web impacts auto purchases in India

11 August 2011

NEW DELHI: Consumers in India are increasingly turning to the internet while on the path to purchase in the auto sector, new figures show.

Google, the online giant, reported that the number of searches relevant to the auto category expanded by 72% year on year in the first six months of 2011, following gains of 110% in 2009 and 84% in 2010.

The amount of enquiries entered via the mobile internet, which has an estimated user base of 40m people at present, leapt by 300% annually, aided by the rising uptake of smartphones.

More specifically, the study suggested 65% of India's web population turned to the net before deciding which vehicle to buy, ahead of the 62% posted by their counterparts in Europe and the US.

Entry-and mid-range cars costing between two lakh rupees ($4,400) and six lakh rupees saw a 50% jump in search volumes, standing at 114% for luxury cars commanding between 15 lakh rupees and 30 lakh rupees.

"We have seen 150% growth in revenues from the auto sector in 2010 and we expect the share of auto adspends on digital media to grow significantly in the next few years," Rajan Anandan, managing director of Google India, told the Business Standard.

Maruti, Honda, Hyundai, General Motors and Tata Motors were the top five automakers in terms of total search levels, trailed by Toyota, Ford, Volkswagen and Fiat.

"Our customers are all internet-savvy," Jnaneswar Sen, Honda's vice president, marketing and sales, said. "We are allocating an increasing proportion of our adspends on online media to reach out to our target clientele."

Among the most popular models recently rolled out in India, as measured by search rates, was the Maruti Alto K10, which registered global sales of 346,800 units last year.

"The volumes sold offline have been reflected in the consumer interest in the car online," said Shashank Srivastav, chief general manager, marketing, of Maruti Suzuki India Limited.

Ford's Figo claimed second place on the same metric, having directed 7% of the entire ad budget to digital media upon its launch.

"This is two to three times what our competitors were spending. That is paying dividends," Nigel Wark, Ford's executive director, marketing sales and service, said.

Data sourced from Business Standard; additional content by Warc staff