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Aspiration on four wheels

Major car brands, both Indian and global, are stretching out to woo 20 and 30 somethings as their lifestyles and purchasing power look up, Rachit Vats reports.

autos Updated: Dec 23, 2012 23:28 IST
Rachit Vats

Vikram Shah, 30, businessman and a smalltime trader in Baroda, recently bought a brand new entry level Audi A4 for Rs.30 lakh. He overshot his budget to buy a saloon that puts him on a higher pedestal in his social circles. “I was willing to spend on a premium brand over a longer term, without pinching my pocket. With Audi, which is relatively niche in this part of the world, I got the best deal,” he said.

Many young consumers like Shah are scouting for similar options across India. What was once considered the bastion of the super-rich, middle-aged, and those arrived in life, has been shattered and premium carmakers such as Audi, BMW and Mercedes-Benz have stepped up their efforts to woo young buyers.

“Today the average Audi buyer is 30-35 years old. We see a very young profile of buyers coming in,” said Michael Perschke, head, Audi India. “The people who buy an Audi today are not only industrialists, but the sons of industrialists. We have a young and a young-at-heart portfolio of buyers – largely self-drivers. We reached out to them through aggressive marketing and products.”

Earlier this year, Audi introduced Q3 for young aspirants. Besides, it keeps a finger on the pulse of the Indian youth through music contests, Facebook, YouTube, ASE, among other avenues. Audi Q3 claims at a significant share of young customers who are professionals, entrepreneurs and businessmen.

“Globally, 50 is the new 30. That itself drives carmakers to ensure a more youthful appeal for products. In India, two factors increase this trend: India does enjoy a demographic dividend and young Indians tend to earn more than their parents. So owning a car becomes a reality much earlier in life,” said Wilfried Aulbur, managing partner, Roland Berger Strategy Consultants, India.

According to a Kotak-Crisil survey, India’s ultra high net worth households (ultra HNHs) will touch Rs.318 trillion in 2016-17, a five-fold increase from Rs.65 trillion in 2011-12. Luxury consumers are also getting younger.

Bavarian auto brand BMW too has seen more youth settle for its cars. “BMW is a young brand. Our products are aspirational and positioning premium,” said Philipp von Sahr, president, BMW India. “We are expanding the portfolio in the lower rung to accommodate more youth, who want to make a statement about their individuality.” BMW plans to offer Indian consumers its X1 hatchback, expected to be launched next year, priced at around Rs.18 lakh.

Mercedes-Benz in India plans to roll out a sports tourer at around Rs.20 lakh. "We are looking at further lowering the entry price for the Mercedes-Benz cars. The new, smaller cities are on our radar, as the luxury market in India is maturing. It's no longer about affordability, but how much consumers can pay per month – 70% of our cars are financed," said Debashis Mitra, director sales and marketing, Mercedes-Benz India. Smaller cities including Agra, Chandigarh, Nagpur and Bhopal are eyeing luxury cars.

“The entry level luxury segment, dominated by the Mercedes Benz C-class, the BMW 3-series and the Audi A4, typically has an age profile that is five-10 years lower than that of a mid-level luxury car. Overall, Indian luxury car buyers are about 10 years younger on average than their European counterparts,” said Aulbur.

A similar trend is being seen at the mass end of the spectrum as well. Maruti Suzuki, Hyundai and Ford are seeing the average age for their cars lowering by the year.

“India is one of the youngest economies with a wide spectrum of young consumers who are professionals, aspirational and looking for modern premium products. Our communication focus for i10, i20 and Eon is to capture their mindshare. Their average age is 20-28 years,” said Nalin Kapoor, senior GM & group head – marketing, Hyundai Motor India.

Anurag Mehrotra, VP marketing, Ford India, said of Ford’s youth marketing: “Youth has a greater affinity for consuming media through their mobile phones, so we have over-indexed our media spends on mobile marketing.”

Tata Nano too, in its new 2012 avatar, is sharply targeting the youth through its communication, youth-appealing features and colours. It recently organised a four-team, 20-day, 2,000 km social road trip, Nano Drive, with MTV. Maruti Suzuki has redesigned its new Alto 800 to appeal to the 25 years-plus consumer.