Across India, consumers spend Rs 80,000-2 lakh more for features they use less than 5% of the time they spend in the car. Drivers admit this, but if an automaker excludes even one of these features, the variant is immediately rejected, industry experts say.
Walk into any car showroom and the script is virtually identical: panoramic sunroofs, ventilated seats, wireless charging, long-range batteries and third-row seats are among the most requested features. “Most buyers hardly use them, but if a feature is missing, the car disappears from view,” said a leading car dealer from Mumbai.The battleground of the Indian car market is currently known in the jargon as the “absence penalty”. Leading automakers emphasized that the fear of missing out on a feature now outweighs the need for it. Data from Jato Dynamics shows that once 40% of a car segment starts offering a certain feature, any variant without this feature sees an 18-22% drop in purchase price despite minimal usage. Buyers aren’t choosing cars because of ventilated seats, but are avoiding cars without seats, manufacturers say.
When Hyundai added ventilated seats to its Creta SUV in 2020, only 22% of buyers found them worth considering in their purchasing decisions. Fast forward a few years, and variants without these in the most competitive Rs 15-20 lakh SUV segment are struggling with lower offtakes and weaker resale values. “Feature adoption is now dramatically accelerating – from sunroofs to ventilated seats and wireless charging,” said Ravi Bhatia, president of Jato Dynamics.Hyundai and Kia in the leadSouth Korean automakers Hyundai and Kia have been pioneers in accelerating this shift.
A feature introduced in a mid-range variant quickly becomes a segment standard. “If we don’t match it soon, we will be dropped from the shortlist,” noted a senior product planner.
At the launch of the Tata Sierra, Shaiesh Chandra, Managing Director and CEO, Tata Motors Passenger Vehicles, summarized the changing mindset. “With the new Sierra, we are setting a new benchmark for what Indian mobility can be,” he said, adding, “Customers deserve more than the ordinary: a premium experience that elevates every journey.”
For value brands, the growing desire for features creates a dilemma. “Skip emerging features to keep costs down and the car feels incomplete; add them proactively and margins shrink. But staying competitive leaves little choice,” said a senior official at a leading automaker.
The gap between buyer intentions and actual purchases also leads to costly business decisions. Surveys show that most insistent features are non-essential, but real-world purchases tell a different story. Once three or more competing models include a feature, its absence becomes a dealbreaker, leading to product planning errors worth Rs 200-500 crore.
“The winning strategy has no unique features, but it ensures you don’t miss the expected features,” said Bhatia.
As competition intensifies, car buying becomes less about utility, and more about the ‘fear of missing out’ or FOMO. This trend is changing automakers’ design decisions, variant strategies and the economics of each new launch, experts say.
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