Amit Kumar, CEO, OLX Autos India
  • What is the current scenario of the Automotive Industry in India?

As of currently, the automotive industry has seen a good recovery in the month of December and ended 2020 on a high. The low base of sales in December 2019 due to inventory destocking owing to BS-IV, a renewed interest in personal transportation mediums owing to heightened hygiene concerns, the launch of new models and an increase in digitisation adopted by OEM’s to attract more customers enabled the automotive industry to recover from the shock of the COVID lockdowns.

However, we are entering 2021 with a lens of cautious optimism and on the back of a V-shaped recovery. The developments of vaccines certainly helped to spur the positive sentiments of the automotive industry and I expect this to continue further in terms of increased sales in 2021.

Examining the wholesale numbers for December they were better than expected despite lower discounts. India’s leading automobile OEM Maruti Suzuki delivered 1.6 lac units and registered a 20% YoY growth and 5% uptick on a sequential basis.With the festive season discounts and government support of auto loan interest below 8 percent, the demand curve for auto has been northwards. As per the data of The Federation of Automobile Dealers Associations (FADA), vehicle registration in October month stood at 14,13,549, which increased to 18,27,990 in the month of November.

On the other hand, the used cars market continued to rally its strong growth momentum in 2020 given the fact that consumers were cash strapped. As per our industry study, OLX Auto Note, 72% of consumers had their budgets impacted due to economic uncertainty hence this helped propel the growth of used cars as an affordable yet accessible alternative for consumers since they opted for their own personal vehicles in lieu of restricted availability of public transport.

  • Could you name some of the major innovations in this field that happened in 2020?

Innovations are spurred on the back of innovative trends and crisis is the mother of necessity. I was delighted to see the way the industry adopted the COVID crisis and translated the same into an opportunity to ensure that people and the economy kept moving.

  1. Personal mobility innovations: The COVID crisis prompted ride-sharing companies to adapt more tech-led interventions including in-app temperature check reports, safety protocols and using digital platforms to assuage the nerves of consumers who didn’t own cars.
  2. Connected cars: Connected cars are an early stage in India but the rising adoption of the same is a strong indicator of changing consumer preferences for the same in years to come. MG and KIA’s stable of models has prompted other OEM’s to look at similar connectivity features since consumers are keen to pay a premium for latest tech-enabled features as it makes their driving experience much less frictionless.
  3. Bridging the digital-physical divide: As consumers refrained from venturing out much owing to work from home, dealers and OEM’s shifted their focus into strengthening their digital presence to attract consumers. Dealers and OEM’s offered virtual tours of the cars, immersive virtual and augmented reality led experiences & dealers hopped onto virtual platforms to generate more leads.
  4. Tech-enabled interventions for used cars: Used car sales in India outnumber new car sales in a 1:1.3 ratio. However, the market at large is fragmented and at OLX Autos our focus remains on bringing in the $24 billion dollar industry into the organised fold. App led inspection reports, mandatory verification, car details linked to easily accessible databases are some of the innovations that happened in the used car space. 

 

  • How has the buying/selling of vehicles changed over time?

 Buying and selling cars in the new and used car space has evolved symmetrically over a period of time. A large chunk of this now happens online. As per industry estimates, 90% of the car buyers begin their purchase journeys online.

In order to buy a car earlier, consumers had to visit multiple dealerships, do their own research and evaluate a multitude of options prior to buying one. However, owing to the content explosion on digital channels consumers today have more avenues to make an informed choice vs earlier. As per Google, 69% of car buyers are influenced by Youtube in their purchase decision.

Another key role has been that of digital platforms such as OLX which have simplified the process of buying or selling a car. With over 20,000 cars listed on OLX daily and with an easy to use customer-centric interface backed by AI/ML technological advancements, the used car buying/selling process is so seamless that it’s as easy as ordering food online.

  • How has the pandemic affected the Automotive Industry?

The pandemic jolted the new automotive industry to a never before seen extent. In April 2020, the industry reported 0 sales for the first time in its history. However, the silver lining in the cloud of COVID has been the resilient agricultural industry. With record monsoons & foodgrain output, the agricultural industry continued to spur the sales of tractors & Agri allied automotive equipment much to the joy of OEM’s. However, the automotive industry gradually recovered with a V-shaped recovery curve and what I foresee is that the pent up demand reflected in the festive season will spill over to 2021 as well. Used cars, on the other hand, saw a massive boost from buyers with demand & supply on OLX being 130% & 120% of precovid levels. The automotive industry is experiencing tailwinds of recovery and overall has been resilient to black-swan events. Indian auto sector is a gigantic U.S. $100 billion industry, and with the gradual increase in demand and economy trying to pace its growth back, we can expect the automobile sector to rise back to a positive level soon! 

  • According to you, what steps can companies take to help the Auto Industry get back to normal? 
  1. Digital platform adoption: Companies need to embrace digital platforms faster to draw more consumers. Merging offline and online channels into a seamless consumer experience will work wonders for the automotive industry.
  2. Upskilling: The new normal is still abnormal and the COVID threat is far from over. Companies need to continuously train their dealerships, on ground staff in safety protocols and dealing with consumers with heightened concerns.
  3. Tech interventions: Technology is the enabler which will allow the industry to recover faster. AI, ML led technologies which allow users to discover better pricing, deals, financing and other services quickly will lead to better recovery for the industry.
  4. Allied services: Buying or selling a car is a multistep process. Companies need to ensure that they offer a bouquet of services to reduce the friction in the process to delight the customer better & keep them engaged. This would also allow companies to generate more revenue.

 

  •  What are some technological innovations we can look forward to in the Industry?

I am excited about the future prospects of the industry when it comes to technology. Some innovations we can get to see are

  1. Assisted driving/semi-autonomous vehicles: This will be a massive game-changer to ease the burden of driving around day to day.
  2. Connected cars: Cars being able to connect with our smartphones to give us an overall diagnosis of the car at one glance will save users effort and money.
  3. Artificial intelligence-led innovations: The prospect of AI warning car users prior to a breakdown of the car will be a lifesaver for many. Real-time information about car health will make owing a car such a delight for many first time car buyers.

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