Buying a car once meant leafing through brochures, asking friends for recommendations and visiting showroom after showroom before deciding which model offered the best value. Today, a prospective buyer can begin the journey with a rather different companion: an artificial intelligence assistant.
From comparing specifications and benchmarking prices to exploring features and visualising different configurations, AI is increasingly becoming part of the decision-making process for Indian car buyers. The shift is particularly pronounced among younger consumers, nearly nine in 10 of whom use AI during their purchase journey.
While evidence of this was available anecdotally, now a report, Global Automotive Consumer Survey: Regional Trends in a Changing World – India, published by consultancy firm Bain and Company based on responses from more than 12,000 car buyers across 11 markets tells us exactly how the trend is taking shape.
It says around 80 per cent of Indian consumers across age groups report using AI while researching or purchasing a vehicle. The findings point to a fundamental change in how cars are discovered and evaluated, with digital tools increasingly influencing decisions before customers set foot in a showroom. The trend had already been gathering steam, but, with AI, it is now possible to fine tune the search by, say, a particular feature.
And while it is possible to buy a car online, in reality technology has not replaced the traditional car dealer. Instead, India’s evolving car-buying journey is emerging as a blend of digital discovery, technology-led comparison and the reassurance of a physical dealership.
Changing the shortlist
For Indian automakers, the growing influence of AI comes at a time when consumer expectations are changing. Technology and features, alongside brand, are emerging as leading purchase considerations, even as affordability remains fundamental.
Greater access to vehicle financing and the aspiration to upgrade to a better-equipped car are also influencing decisions. Features once associated with premium models are increasingly available in more affordable segments, raising expectations across the market.
For buyers, AI tools can simplify the process of comparing models, understanding equipment differences and weighing prices against features. Online configurators and 360° visualisations further help consumers explore vehicles before arranging a test drive.
“Indian car buyers are increasingly looking beyond price alone when choosing a vehicle,” says Rahul Mishra, partner in Bain’s India Automotive practice. Consumers, he adds, are also assessing the value they receive for the price they pay.
The implications for manufacturers are significant. A brand can no longer rely exclusively on its reputation or a dealer’s sales pitch to make the shortlist. Its features, pricing and perceived value must also stand up to increasingly accessible digital comparisons.
The showroom
holds ground
Despite the acceleration of digital research, the dealership continues to occupy a central position in the buying process. Globally, more than 80 per cent of respondents combine online and offline interactions when purchasing a car, while more than six in 10 begin their journey online. Nevertheless, nine in 10 complete their purchases offline.
Fewer Gen Y and Z buyers had at least two interactions with dealers than Baby Boomers and Generation X buyers. That goes to show that researching a car and committing to one are different exercises. Digital tools can help buyers narrow their choices, but physical interactions still matter when evaluating a vehicle and completing the transaction.
Mahadevan Seetharaman, leader of Bain’s India Advanced Manufacturing & Services practice, sums up the shift thus: Digital channels are becoming increasingly important for discovery and research, while dealerships continued to play a key role in evaluation and purchase completion.