The last couple of years have been turbulent for the Indian automobile industry. A decline in volume sales, market instability and capacity overhang combined to create a gloomy outlook for this sector.
But the dust is now settling, and some categories within the automobile industry are showing signs of stabilization—and in some cases, even a gradual increase in sales. Still, the passenger car segment, in particular, needs a quick boost to profit. Given the existing capacity overhang, manufacturers may have to explore avenues other than volume sales to achieve this. One such avenue could be the sale of top-end variants.
Clearly, not everyone in the market to buy a new car will purchase a top-end variant. Only 35% of the total auto consumer population are interested in and purchase top-end variants/trims, whether sedans or hatchbacks. At Nielsen, we call them super consumers.
So, who is a super consumer and how are they different from regular consumers?
Getting To Know The Super Consumer
The cliché of ‘boys and their toys’ seems to have its roots in truth, at least for this consumer group. Consumers who own top-end variants tend to be males between the ages of 25 to 35. They also are metro dwellers concentrated, for the most part, in Mumbai and Delhi.
Not surprisingly, they are affluent and earn an average monthly salary of at least INR 60,000 or more. They are fairly successful professionals, often in middle- or senior-level management positions or successful business owners.
These consumers are brand conscious and tend to gravitate towards premium brands, whether in footwear, apparel or fashion accessories. Most of these brands have strong associations with quality. These consumers also engage in a number of activities that are associated with their elite lifestyles, such as regularly frequenting gyms, owning time-share holidays, or club memberships where they play sports like tennis and cricket.
The Super Consumer And His Garage
Approximately 40% of the super consumer segment owns more than one car. These dual-car-owning consumers often have households with two or more wage-earning members. Similarly, businessmen in this category operate their businesses with more than 10 employees.
While super consumers span across all types of cars, more consumers looking for high-end accessories and detailing (high trim) can be found in the sedan and multi-purpose vehicle (MPV) categories.
But where high-trim variants in most other segments are largely a male preserve, the premium car category is different. Comprising a higher ratio of women compared to other categories, consumers in this segment are affluent, with a monthly income of over a lakh. Aged between 26 to 30 years, they are also older than the average super consumer. We also found that Hyderabad has a significant population of such consumers.
WINNING WITH SUPER CONSUMERS
Unlike his price conscious counterpart who values practicality, the super consumer is looking for a vehicle that is smart, premium, trustworthy, safe, trendy and world class. These high-end shoppers use their car as more than just a means of transport.
racing to the top
While India is still primarily a small-car market, this is gradually changing. Despite the dismal start to 2014, the excise duty cuts announced in the national budget coupled with announcements of new launches brought cautious cheer to the Indian automotive industry. How manufacturers and retailers leverage specific groups like the super consumer may be the deciding factor in market success.