Wheels of change

Manufacturers increase investments in digital solutions as challenges hobble sector

- AKANKSHA NAGAR

THIS WILL SOUND counter-intuitive: More than 90% of the car sales take place though physical outlets, but the auto industry has turned out to be the poster-child of digital marketing with more than 40% of the industry marketing spends moving to digital channels over the last two years.

Here's the thing: Approximately 80% of automobile sales in 2022 were "influenced by the digital channel last year. Various industry estimates also show about 75% of the people decide on a brand while close to 60% even decide on the model before they visit an auto dealership.

You know where they seek information from. Most importantly, almost half the auto owning population already use the digital channel for booking vehicle services.

Says Shashank Srivastava, senior executive director, Maruti Suzuki India, "Digital is making the whole system more efficient; the productivity is higher; you can save on things like manpower cost. It helps in personalised interaction which improves conversion rates. There is also good optimisation of ad budgets. It is a great enabler amid the tough conditions arising from either inflation or lower liquidity." Little wonder, digital innovation is being adopted across the value chain in the industry - from the front end customer-facing roles to operations and support functions with the sole objective to improve leads and ultimately conversion and customer retention.

Shifting sands