Nine Out Of 10 Car Buyers In India Prefer Physical Dealership Over Online Options: Study

Even as online purchasing has undergone an enormous change, when it comes to buying cars, people still make their purchase decisions through physical dealerships, according to a survey conducted by Urban Science.

The findings of the study come at a time when people have increasingly opted for digital platforms to buy large home appliances like televisions, refrigerators, air conditioners, etc., and even groceries.

According to the study, which covered 9,000 buyers across the US, Germany, UK, China, India, and Mexico, most Indian buyers still predominantly prefer purchasing vehicles through a traditional dealership. This involves them visiting the car dealerships in person, where trust and relationship-building play pivotal roles.

From among 10 car buyers in India, almost nine will be more inclined to visit a physical dealership. This showed that in-person visits influence the overall buying decision, the research found.

The survey considers India to be a good example of how to combine growing online demand with a traditional car-buying market that relies on trust.

While digital platforms are poised to play a complimentary role, the human element remains the heart of India's car-buying experience, the study said.

Due to their trust, personalised deals, relationships, and after-sales support, dealerships are an indispensable part of the car-buying process, the survey noted.

While digital platforms complement the purchasing decision, the overall vehicle purchase experience is dependent on the human element.

With the expansion of their physical networks, automakers are aligning with this enduring preference for trust, tangibility, and personal interaction, which still define the market, it added.

However, the survey found that while currently, traditional dealerships dominate India's automotive landscape, the digital wave is steadily gaining momentum.

And that is due to youth and tech-savvy consumers researching online before stepping into a showroom, the study said.

The trend suggests a future where dealerships and online platforms coexist, creating a hybrid model that combines the strengths of both approaches, it added.

Hence, to meet the evolving consumer expectations, at the same time preserving the trust and personal connection that traditional dealerships uniquely provide, the study recommends striking the right balance.

According to an earlier study, conducted by Nielsen for Google India in Oct. 2023, at least 50% of car buyers in India research online before making the purchase. It had also found that buyers spend about 9–12 weeks researching before arriving at a decision.

The Nielsen study had also found that half of those who researched online had a change of heart and opted for a different car brand than what they had initially planned for. And, they preferred to conduct their research over the internet rather than television or print media because of the easy access to necessary information and media formats such as videos. As part of their research, over 56% of buyers watched videos.

Meanwhile, in November, the number of car registrations on the government's VAHAN website had witnessed a 13.72% decline from the year-ago period and a 33.37% decline sequentially to 3,21,943 units.

(With PTI inputs)