The report reveals a growing inclination toward hybrid vehicles over electric vehicles (EVs), primarily due to concerns about charging infrastructure and the perceived reliability of hybrids.
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The report reveals a growing inclination toward hybrid vehicles over electric vehicles (EVs), primarily due to concerns about charging infrastructure and the perceived reliability of hybrids.
The Indian passenger vehicle (PV) market, traditionally a stronghold of consistent growth, has encountered nuanced challenges and shifts in consumer preferences, according to a recent survey, ‘Shifting gears: Understanding passenger vehicle market trends in India’ by Grant Thornton Bharat. This festive season, a pivotal sales period that traditionally contributes 30-40 per cent of annual sales, market analysts anticipate changes as the industry confronts inventory pressures, evolving consumer expectations, and technological advancements.
Also Read: Festive Season 2024: Two-wheelers That Have Become More Affordable
The first half of FY25 has seen muted growth in the PV sector, marking only a 0.5 per cent rise in sales, which falls short of the industry’s forecast of 3–4 per cent. Automakers dispatched about 2.08 million units from April to September 2024, while regional disruptions, like heatwaves, heavy rains, and election cycles, were noted as influencing factors. Additionally, inventory levels have surged to 7.9 lakh units valued at ₹79,000 crore, resulting in an average stock duration of 80–85 days—an unprecedented situation putting manufacturers under pressure to offer discounts and incentivise purchases this festive season.
The report reveals a growing inclination toward hybrid vehicles over electric vehicles (EVs), primarily due to concerns about charging infrastructure and the perceived reliability of hybrids. State-driven incentives, such as tax exemptions for strong hybrids, have further spurred this preference. While the Indian EV market has the potential for significant expansion, analysts suggest it may trail behind other major economies in adoption rates due to infrastructural limitations.
Also Read: Festive Season 2024: Which CNG Car To Consider Under ₹15 Lakh
SUVs continue to dominate the market, accounting for 65 per cent of total PV sales. This trend underscores the popularity of utility and sports utility vehicles, which have increased by 13 per cent year-on-year. Meanwhile, 85 per cent of surveyed consumers expressed a willingness to explore high-end premium models, signalling a “premiumisation” trend. This shift is partially driven by economic growth, stable monetary policies, and a rise in disposable incomes among India’s affluent class, which is expected to nearly double within the next three years.
While purchases remain predominantly offline, digital platforms are increasingly shaping the consumer decision-making process. The report indicates that 74 per cent of customers now use digital media, including social networks and car websites, to research their options—a substantial increase from 56 per cent two years prior. Automakers have adapted by integrating digital elements, creating "phygital" solutions that allow consumers to browse, configure, and even initiate purchases online before completing them at dealerships.
From a consumer standpoint, the emphasis on premium models and hybrid vehicles resonates with a more aspirational Indian market. Despite the willingness to embrace hybrid technology and premium models, buyers remain cautious, expecting substantial discounts due to the prevailing inventory surplus. Many consumers view these discounts as essential, with 89 per cent of respondents in the survey anticipating notable reductions this festive season.
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