Automakers drive into the metaverse to cater to digitally savvy customers

Marquee car companies are launching virtual reality platforms to cater to digitally savvy younger customers

Last week, car-market leader Maruti Suzuki India unveiled the Grand Vitara on NEXAverse, its metaverse initiative. The mid-size sport utility vehicle (SUV) will also be the first car in the world that can be booked through a metaverse platform, claims Maruti. 

The company plans to spend 10-15 per cent — or Rs 6-8 crore — of its innovation budget on the metaverse, says Shashank Srivastava, senior executive director, sales and marketing, at the firm. He adds that this is only the “initial step.”

(The metaverse is an online, immersive, 3D universe where users can interact digitally.)

Srivastava says that the move will require the company to not only keep abreast of rapidly changing new technologies, but also work on improvising and widening the scope of current offerings by adding more models, more applications and features.

Maruti is not the only auto company that is joining the metaverse bandwagon. MG Motor India, which launched the MGverse last month, was the first company to launch itself on the metaverse. Swedish luxury carmaker Volvo Cars, too, had a pre-event launch of its XC40 Recharge on the VolvoVerse on July 21.    

The main reason why these automakers are getting onto the metaverse is to enhance the customer experience, as more and more buyers — especially the younger generation — prefer to conduct their affairs on digital platforms.

A car buying process includes 28 touch-points, of which 17-20 have been digitised by most carmakers. Processes such as selecting financing options and related documentation will be digitalised in the future, according to Deloitte’s Global State of Consumer Tracker Survey 2021.

“With the metaverse being the latest buzzword, the automotive sector is all set to give in to the hype and grab a slice of the shared worlds driven by virtual products,” says Ashwani Arora, executive director, Market Xcel, a market research firm that delivers customised research solutions. 

Automakers are looking at the metaverse as much more than just a platform to showcase their new launches. For instance, MG Motor India, which has positioned itself as an “auto tech brand”, has it all planned, says Gaurav Gupta, the company’s chief commercial officer. “We are the only company that has clearly spelt out the way it seeks to evolve the MGverse.” Its use-case will go beyond business-to-consumer, and also be business-to-business, he explains.

MGverse combines five different virtual spaces, including the Explore & Creator Centre, NFT (non-fungible tokens) Gallery, virtual MG Car Club, a gaming arena, and the MG Knowledge Centre for employees.

The Explore & Creator Centre allows users to personalise, accessorise and build MG vehicle models, and lets them take a virtual test drive. The NFT Gallery will be a virtual museum. The virtual MG Car Club is a digital twin of the real MG Car Club, where members will be able to connect with each other and access member-only events and concerts digitally. The gaming arena will host video games, while the MG Knowledge Centre will train and upskill MG employees and partners.

MG is also among the first few auto majors to have launched an NFT collection. “MG India issued 1,100 tokens in Indian rupees in denominations of Rs 500 to Rs 60,000. The entire lot was bought,” says Gupta. The company plans to issue more such tokens this year.    

The rationale for metaverse

“The traditional ways in which we think about customer interaction are going to be completely transformed. None of the conventional ways of dealing with a customer are going to be applied anymore, and companies will have to re-imagine the whole exercise,” says Pranab Ghosh, Lead, Metaverse Capability, at Capgemini Invent.

Apart from the automobile industry, companies from such areas as banking, insurance and agri-businesses have also created their metaverse platforms. But with the exception of auto and retail, most have made a beginning in the B2B space, Ghosh explains. 

The auto sector has also been busy launching NFTs. Barring the art world, which engages with customers in the digital world, auto is perhaps one of the largest sectors to adopt NFTs. 

Over the last six months, several global automakers — including Hyundai Motor Co, Bentley, Lamborghini, and McLaren Automotive, to name a few — have sold archival materials, scale models, merchandise, art work, special and limited edition models, and so on, to cash in on their brands’ heritage and the demand for them among automobile enthusiasts.      

Back home in India, in March this year, Mahindra & Mahindra announced the release of its first tranche of NFTs — based on the Mahindra Thar SUV — in partnership with Tech Mahindra.

“The journey of digital assets in the metaverse has just started and will only proliferate further,” says Vikas Kumar, vice-president, Capgemini Invent. “One will see more adopters of the metaverse as the technology evolves.” The metaverse might be virtual, but the fun will be real, he notes.

Beyond customer engagement

Analysts tracking the industry believe that the metaverse will impact all dimensions of the auto industry — from sales to supply chains — which, in turn, has the potential to change the way the industry works.

Take the case of Mercedes-Benz, which, other than NFTs, is also using blockchain to track emissions in the cobalt supply chain. Cobalt is a key component in electrical vehicle batteries.

While the metaverse in the automotive market was valued at $1,429.5 million in 2021, its value is projected to shoot up to $10,996.1 million by 2028, growing at a compounded annual growth rate of more than 40.5 per cent between 2022 and 2028, says Arora.