KPMG White Paper

© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved.

The automotive industry has been playing a key role in the Indian Economy with its contribution of almost 7 percent to the country’s GDP1. According to the KPMG’s Global Automotive Executive Survey 2012, India is likely to be the world’s 3rd largest producer of passenger cars by 2016. It is also expected to be the 3rd largest automotive Industry globally post 2020.

The industry faces rapidly changing markets, new sources of competition, volatile costs and an ever-demanding

Indian customer. Product differentiation is no longer a protected value proposition in the face of immense competition and high cost involvement in a longer innovation cycle. Thus, differentiation by creating holistic customer experience is of prime importance to this sector in order to create a loyal customer base and to unleash satisfied brand evangelists. The growing pervasiveness of web, social and mobile have introduced new ways for the customers to interact with each other and with the brands. The extent of

digital media penetration and its growing importance in the modern Indian market is affirmed by consumer usage and behaviour statistics.

The automotive industry is not immune to the second-screen phenomenon. While there is an Indian consumer who can be reached and influenced through conventional media like television, print and radio, there is an emerging class of automotive customers who seek awareness and support through digital media.

Sources: SIAM India, ‘Auto Industry’ – IBEF, IAMAI, KPCB Internet Trends -2013, Comscore, ‘Communications in India’ Wikipedia, Digital Influence study by Fleishman Hillard

1. 52nd SIAM ANNUAL CONVENTION 2012. Reference : http://www.siamindia.com/Event/view-eventhead.aspx?id=269

Key indian statistics


Advent of the digital era in automotive

India is among the top three fastest growing Internet markets in the world with over 137 million internet users growing at a rate of 26 percent annually.

On an average 772 minutes/user are spent online in a month in India.

Social media is penetrating deep into the lives of Indians. Out of the total Internet users in the country, 62 million use social media.

Facebook is the leading websiteaccessed by 97 percent of all Social Media users in the country.

India boasts of more than 44 million smart-phone subscribers.

Over 50 percent of active Internet users in the country share ‘everything’ or ‘most things’ they see on the web.

14.3 mn Indians shopped online in 2012.

Total money spent by customers online in India is set to grow at 33 percent and is estimated to clock a total of INR 63,000 crores in 2013.

Digital advertising market in India has grown to INR 2,260 crores in FY 2012-13 and is estimated to reach 2,938 crores in FY 2013-14.

79 percent of online Indians rate internet as most influential in their purchase decision as against 60 percent who rate ‘advice from friends & family’ as an influence.

1 The Digital Passenger

The Auto Customer is• Visiting web, social and mobile properties of independent third party review forums and discussion boards to compare

different brands, to evaluate fuel efficiency, to check vehicle performance reviews, dealership reviews and other customers’ recommendations.

• Visiting OEMs’ web, social and mobile properties to research product features, check pricing and compare same brand models.

• Visiting Dealers’ digital real estate to check for inventory, scheduling test drives and checking on special offers, discounts etc.

• Using Social Media networking web platforms and mobile sites to discuss with friends, family, other consumers and Auto experts.

The shifting paradigms in the digital age

The Auto customers, today, are well connected, are empowered with information and they value social recommendations. Purchase decisions of potential buyers are highly influenced by enormous volumes of information available online. The conversations in their social graph go a long way in creating brand and product perceptions. Online Information sources have definitely put customers in charge of the processes hitherto controlled by OEMs and dealers.

This behaviour presents an opportunity for the Automotive companies to embrace digital technologies to execute customer centric strategies and to serve the needs of the digital driver thereby converting them into loyal advocates. To win in the game, automotive companies need to provide guidance and support to the customer at each step of the customer relationship life cycle.

OEMs in India are realizing the disruptive impact of digital media and are experimenting with diverse digital

channels to engage and influence existing and potential customers. The companies are expanding their digital footprint to be present where their customers are. Recent series of digital campaigns and increasing spends on online advertising in India [2,260 crores INR market (FY 2012-13) increasing at >30 percent yearly*] also point towards the fact that the automotive industry is clearly hastening to adopt digital as a medium to connect, engage and influence their customers.

However, considering the evolving nature of digital media universe, are the OEMs and dealerships leveraging the opportunity enough to connect with their customers?

Are Auto companies enabling themselves to provide holistic customer experiences in order to increase customer delight and advocacy?


Sources: IAMAI study - Digital Advertising in India Report, March 2013, KPMG in India Analysis


Traditional customer at the mercy of OEMs/ Dealers

Traditionally, touch points in the customer relationship life cycle in the automotive industry involved traditional media such as print, television ads along with dealer showrooms and workshops, physical auto shows/events.

Consequently, opportunities to influence and impel the customer towards a purchase existed only through these physical channels that had limited reach. OEMs were key drivers in shaping the

perceptions during the Fascination and Exploration phases whereas dealerships played more important roles in the Evaluation, Acquisition and Affiliation phases. Product research, product experience (test drive), after sales service, spare parts purchase and warranty were areas totally dominated by dealers.

The traditional automotive marketplace was controlled by OEMs and dealers.

The channels for communicating and engaging with customers were few and OEMs managed brand messaging and positioning at their own behest. The collaboration between the OEMs and dealers across the customer relationship cycle was limited. The dealers were left to fend for themselves for meaningful engagement with the customers for sales and after sales activities.



In the new age, the customers are well-equipped with information long before they step into a dealership. The customers are now in more control of the sales and after sales processes. Internet has emerged as not just another source of information for car buyers. Instead, it is changing the buyers’ behaviour throughout the information gathering and buying process. Marketers’ need to leverage the opportunities by this paradigm shift and reallocate budgets and focus online to take use these channels to their advantage.

The changing power equation

Digitalization of Word of MouthAutomotive customers could come from different walks of life but they have always shared a common need to connect with like minded drivers, express opinions, seek advice, share their experiences and even show off. Historically, satisfied customers could share their brand experiences only with a limited set of people including family and close friends but with the advent of digital platforms like social media and mobile, customers can now connect and share positive or negative pre/post purchase experiences with a much larger audience consequently expanding their influential reach.

Digital media offers marketers the opportunity to leverage the power of word of mouth and expand its reach.

Pre and post purchase experiences throughout the customer relationship life cycle are now shared online on social networking websites, social communities and third party consumer review sites. Studies suggest that customers trust independent/objective analysis and opinions more than the information displayed on the OEMs’ or dealers’ web and mobile properties. This means OEMs need to find a way to be part of or positively influence these conversations. Auto companies need to monitor conversations across communities/channels, focus on building a positive brand reputation online and constructively engage with their existing and potential customers. This would also need effective collaboration with dealers.

Role of Dealers and OEMs Has ChangedThe average number of dealer showroom visits prior to purchase have decreased today. The role of the dealer as an information provider has been clipped and is now focused primarily on direct product experience(test-drive), sale & price negotiations and after sales servicing.

With large number of customers making their positive or negative purchase decisions online even before visiting the dealership presents an opportunity for OEMs to get more involved and handhold the customer through the entire decision making process. Although much of the exploration happens on third-party websites, OEMs can try to influence conversations across these platforms. OEMs can also drive engagement by providing evaluation tools on their own web, social and mobile properties.

Automakers can also invest efforts in influencing their customers post purchase of vehicle while this was a domain entirely in the hands of and dominated by dealerships in the past. By way of platforms like social media, mobile and digitally enabled vehicle systems (telematics), OEMs can now be in constant touch with their customers and monitor their sentiments regularly. Satisfied customers can be induced to share their positive experiences online with other potential customers seeking advice and recommendations. OEMs can benefit by establish closer relationships with their dealers to create digitized sales, marketing and servicing channels that are more effective in converting digital consumers into brand advocates.

of Indians Auto buyers and owners use social forums to communicate and express independent opinions and Automotive brand experiences*53%


Sources: Webchutney Digital Automotive Report - 2010


Indian OEMs do have a footprint online and some of them have the most impressive follower bases, however, the vital purpose of engaging customers seems to have taken a backseat. Clearly, most OEMs need to understand that meaningful engagement with their audience is more important than adding numbers to the follower base. Most brands push content related to brand ad campaigns and self promotions on social media which may not strike a chord with all the customers at various levels of maturity of relationship with these brands. The digital content strategy focused only on brand awareness does not keep the audience engaged across the various phases of the customer relationship cycle. It is imperative that the auto brands understand the online behaviour and preferences of their audience with the aim to design online content to connect with the customers at a personal level. OEMs need to make the best of the opportunity afforded by digital technologies to enable and to encourage positive reviews, opinions and discussions about their brand and models. The collaboration with dealers would also play an important role in guiding the behaviour of customers throughout the various phases of the relationship journey.

Improving upon their internal processes to support online customer servicing is an opportunity that can be explored. It was observed that OEM’s hardly reply to customer queries posted online and the turnaround time when they do is undesirable. The digital multi-taskers are running out of patience and their attention spans are very short. Hence, they reach out to third party online information sources for help if their queries/ concerns go unaddressed. The lost opportunity to address customers’ queries and concerns may result in collateral damage when negative reviews in this regard are posted by these very customers on online discussion forums.

Auto makers’ digital efforts seem to be inclined towards paid banner advertising and establishing large social properties but relatively less on creating content and campaigns that effectively connect with customers and lead to exemplar engagement.

Considering the importance of web search in the auto customer life cycle, it is surprising to note that OEMs are not focusing on tapping the enormous potential of search traffic. Basic keywords like ‘buy car’, ‘best car in India’, ‘best car below 5 lakhs’, ‘car with best mileage India’, ‘best petrol car’, ‘car with best pricing and mileage’ are completely captured by third party websites and hardly any OEM’s webpages rank high (paid or organically) for these keywords on web or mobile. Hence, SEO is a big opportunity for OEMs to invest resources in.

A few strikingly successful digital campaigns in the auto industry in the recent past cannot be denied their limelight. However, there is a lot of ground yet to be covered. The Indian automotive industry’s inhibition to completely embrace digital media seems to be mounting from the apprehensions to move beyond the traditional physical model which was successful in the past. However, sooner than later, auto companies will need to face the digital world head on and focus their digital efforts to complement their traditional offline campaigns. Early adaptors are set to see immense benefits and top line growth as a result.

KPMG studied social presence and activities of OEMs in the Indian market and analyzed metrics such as number and quality of posts, comments/likes/shares per post and brand responses per post, to evaluate their online engagement and customer servicing levels. It was observed that European auto brands in India emerged as leaders in the digital space. European OEMs are fostering to establish a relatively more engaged online audience and are demonstrating clear leadership vis-a-vis their Indian or other foreign counterparts.

Indian auto industry digital marketing maturity

Automotive Companies need additional drive



We believe that OEMs need to constantly identify effective forms of listening, engaging, influencing customers in order to stay in the competition and to capture mindshare and walletshare. We assist OEMs to break through the clutter of the digital universe and to reach the right audience at the right time with the right messaging. Our approach for the automotive industry focuses on developing online brand advocates who

can promote the brand by sharing their positive experiences and steer a positive word of mouth.

We help automakers in leveraging and integrating web, social and mobile technologies while offering a consistent and customized experience to customers. With multiple touch points, both online and offline, OEMs need to ensure that the complete purchase and post purchase experience is seamless and enriching for the customer.

We follow a structured approach to build and deliver best in class digital capabilities for automakers that serve the needs and interests of their customers. We handhold OEMs right from strategy definition, through to execution and along with performance measurement and optimization ongoing basis. We would work closely with you as trusted transformation advisors throughout your optimized digital leverage journey.

Our value proposition

• Web/Social Media Diagnostics

• Competitor /Market Analysis

• Online-Offline Process Definition

• Technology Readiness Assessment

• Commercial (eCommerce/mCommerce) opportunity Identification

• Definition of governance framework

• Digital/Social Media Policy definition and risk mitigation

• Digital Transformation Strategy

• Review / support for business case for change

• Offline-Online Process Integration

• Digital Assets Creation

• SEO,PPC, Mobile Readiness (App development/Site Optimization), Web/Mobile Design, Content Design, Shopping cart

• Implementation / Deployment of Web/Social listening & Analytics Tools

• Technology Integration with existing systems

• Program Management

• Change Management

• Governance Framework rollout

• Analysis and Interpretation of Web/Social Media Monitoring /Listening Outputs

• Analytics based campaign management/Display Advertising/PPC/Drip Marketing

• Ongoing Digital Services – SEO, Content Management, App Development, Website Management

• KPI’s measurement and performance reporting

• Channel Optimization

DEFINE 1 2 3DEPLOY DRIVE


Some questions we help you answer along the way• What are the preferences of my end customers?

• How do I segment and cluster my customers to ensure maximum personalization of their online experiences?

• How do I differentiate my online product and brand experience from other auto brands?

• Who are my most loyal customers and how do I cultivate them to drive online advocacy?

• How do I manage my online reputation that drives positive brand consideration?

• How do I manage real time, ongoing and interactive dialogue with my customers to develop greater trust?

• How can I work in collaboration with my dealers to ensure consistent brand experience during and after purchase?

• How do I manage online and offline brand messaging consistency and customer experiences?

• How do I extract key customer trends from the data collected online and apply that to create effective campaigns?

• How do I optimize the cost and performance of campaigns to extract better ROI?

Many OEMs’ are still spending large part of their marketing buck on the conventional channels. Due to their scattershot approach to digital media, they run the risk of being left behind in reaching out to and in connecting with their customers strategically.

KPMG keeps abreast of latest industry dynamics and our value proposition evolves post a thorough understanding of the industry and auto customers to enable OEMs and dealers get more from their digital marketing efforts.


Date post:	17-Jul-2015
Category:	Documents
Upload:	twist-ho-gaya-dot
View:	66 times
Download:	1 times

KPMG White Paper

Documents