Strong acceptance of eCommerce and digitization is expected to accelerate the growth of India’s auto sector, advisory firm Grant Thornton Bharat said.
Accordingly, India’s automobile market is estimated to grow more than ‘2.3X’ from $222 billion currently to $512 billion by 2026.
Notably, the analysis by Allied Market Research, Market Line, Reserve Bank of India, and Grant Thornton Bharat showed that e-commerce portals focused on the automobile market, such as Droom, Cardekho, and Olx have put consumers and the user experience in the spotlight helping the manufacturers attract more users.
Besides, the growing base of internet and smartphone users will further boost the digital transformation, and lead to an increase in expanding the market size of the e-commerce portals.
“The strong emergence and acceptance of the online channel have provided an impetus to seamless solutions, price discovery, transparency, digital real-time payments along with certification on the quality of the vehicle for the consumers in the auto sector,” said Rahul Kapur, Partner, Growth at Grant Thornton Bharat.
According to the analysis report, since last year, Maruti Suzuki saw a five-fold increase in sales through digital means which now stand at 20 per cent of their total sales.
“These changes in consumer’s buying and research preferences signal a shift for the auto sector, as Covid19 played a big part in the online channel gaining traction.”
“Technology-enabled innovations like secure digital payments, hyper-logical logistics, analytics-driven customer engagement, increasing consumer awareness, and digital advertisements are likely to support the growth going forward.”
As per the report, other factors such as rising middle class and young population with increasing disposable incomes will contribute towards growing the sector.
Furthermore, ease of owning a vehicle through the availability of multiple financing options as well as reduction in vehicle ownership tenure due to regulatory rules in some states, cited the report as other growth inducing factors.