The Finance minister recently attributed the decline in car sales to increased preference and usage of cabs such as uber and ola among the Millenials. The trolls got busy to the extent of ridiculing the statement, a reflection of social mob behavior. This was followed by a remark of Mr.R.C.Bhargava, an automotive expert, which suggested that cars have become very expensive hence lesser buyers. Uday Kotak further added that cars as possession are no longer a status symbol for the youngsters hence it is cool to use cabs rather than buy a car. There could be many more viewpoints on this which are not accounted here in this post. However, we need to uncover this complex phenomenon by answering a simple question; why do people buy a car? what are the fundamental motives that drive the buying decision?
Marketing literature organizes the fundamental motives in seven categories; self-protection, disease avoidance, affiliation, status, mate acquisition, mate retention, and kin care. As one would note, these motives very well capture the evolutionary needs of the human being. In the context of car buying decisions, the most important driver could be a strong need for safety, affiliation, and status. Safety needs are manifested in different behavioral tendencies that include increased aversion to loss and decreased risk-taking. Now consider the consumer sentiments from the end of last year to this year September. Largely it was believed that post-elections, the country’s economy will grow faster and that would bring more stability in jobs and income. Clearly, with no such signs in sight, the sentiments took a dip and the safety motive got triggered. Therefore, less number of the first-time buyer and even lesser number of upgrade buyers. Next, consider the changing spending preferences among the Millenials ; it is a well documented trend that they tend to spend on experiences and less on material possession. That explains the need for affiliation to be there on vacations, eating out and indulging in adventure sports rather than spending money on buying cars.( Just consider the way affiliation need can be fulfilled by being on Instagram or facebook with experience content!) The need for status still remains strong but the choice of possession to display status has moved to soft acquisitions and cars have lost their preferred position on the list.
Therefore, Nirmala Sitharaman, R C Bhargava and Uday Kotak are all right in their assessment of the slowdown trend in the automobile business. Most of us believe that economic slowdown is cyclical and recovery is around the corner. However, the auto marketers must pick up the right levers to accelerate demand by devising ways to trigger two keys motives: mate acquisition, mate retention and kin care ; and position the idea of possessing a car in a novel manner.