Wheels of change

Wheels of change

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Apr 14, 2022

Manufacturers increase investments in digital solutions as challenges hobble sector

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

Digital barely made up 15% of Maruti Suzuki India’s overall media expenditure three years ago; today it is above 30% of the total media expenditure. Its digital inquiries are almost 35% of its total retail inquiries, which is higher than the showroom walk-ins. For Nissan India, digitally influenced leads today are up to 30% and its digital ad spends are over 40%. Whereas for Skoda Auto Volkswagen India digital spending at present is up to 40% of the overall ad spends, a shift from over 15% in 2020.

Ad spends apart, the recent supply-chain challenges have further nudged the industry to think about digitising their supply chains. “Better planning, optimisation, and execution capabilities are being adopted to build a resilient supply chain. This will not only remove service levels but also improve costs by 10-15% for vehicles, parts, spares and accessories businesses,” adds Rahul Mishra, partner, Kearney.

In the entire journey of buying an automobile, there are 26 touchpoints for prospective customers, shares Maruti Suzuki India’s Shashank Srivastava — starting from visiting the website to actually taking home her vehicle. Twenty-four (excluding delivery and test drives; including financing) of these have been digitalised by the company. From having a customer data platform (CDP) to having a single view of the customer, he says, digital helps it personalise the communication to enable upsell and cross-sell.

The company is also using digital media to solve some of its network issues, as well as inventory management. For instance, its NexaVerse and ArenaVerse launches enabled remote customers a 3D immersive experience of the products. Apart from that, geofencing, remote diagnostics and 3D printing to help reduce the time of development of components are some of the other technologies the company has deployed.

MG Motor India is also using advanced analytics to improve customer experience (CX) and drive sales. Amongst the first carmakers to launch an internet car — the Hector — in India, the company has a keen focus on delivering on its vision for CASE (connected, autonomous, shared, electric) mobility. It is offering digital services such as MG eXpert, MG e-Pay, NFTs, and virtual showroom experiences among others. “By embracing new technologies and channels, we aim to differentiate ourselves in the highly competitive Indian automotive market and drive sales growth in the long run,” Gaurav Gupta, CCO of MG Motor India, says.

Apart from providing customers with a connected omni-channel experience, Tata Motors has brought its dealers under a hyperlocal programme to connect every physical touchpoint in the customer journey to a digital ecosystem. The company is also using digital to ensure the customer has an enriching after-sales experience, says a company spokesperson.

For its part, Nissan Motor India has developed an end-to-end digital shopping solution called Shop@Home for its consumers, which includes a full range of customer engagement tools to assist customers to make a purchase decision like configurator, variant comparison tool, variant recommender, virtual showroom, online finance, etc. Mohan Wilson, director, marketing, product & customer experience at Nissan Motor India, says that more than 30% of the company’s retail sales come from digital which used to be 5% a couple of years back. “We soon will be introducing Nissan One — which is a single sign-on based dynamic UI platform for both new and existing customers, where the user/prospect will have a lifelong ID enabling him to personalise his digital CX and define his journey, the way he wants.”

In all this, says Amaresh Godbole, CEO, digital technology business, Publicis Groupe, ensuring the car portal content accurately reflects the brand would be key.

Source - financialexpress.com

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