The Indian automobile market is witnessing a big shift as consumers show more interest in luxury as well as sustainable vehicle options. A recent survey conducted by Grant Thornton Bharat titled Shifting Gears: Understanding Passenger Vehicle Market Trends shows that consumers have developed an interest in premium models and sustainable mobility options, especially hybrid vehicles, as the market readies itself for a new epoch.
Shift Toward Hybrid Vehicle Models Rather than Electric Vehicle (EV) Models
Although 85% of the respondents are looking forward to getting behind the wheel of a premium model, it further shows a preference towards luxury among passenger vehicles. Issues of sustainability and fuel sources have resulted in 40% of the respondents indicating an inclination toward hybrid models rather than 17% of the EV models. Although electric vehicles are oftentimes discussed as a future solution, this survey has shown that, at this point, the consumer market is moving towards hybrids because of the shortcomings in infrastructure and incentives associated with current EVs.
This pattern of preference for hybrids shows that consumers are exploring more sustainable options that fit their present needs while waiting for more robust EV alternatives. Hybrids should be a prominent part of the process through which consumers become accustomed to the new technologies and thus prepare the ground for mass acceptance of EVs in the near future.
Changing Automobile Market Dynamics: Companies Must Adapt
The survey further explains that the changing preferences of Indian consumers require the automakers to adapt to a broad range of demands. “The changing market dynamics requires the manufacturers to provide a mix of hybrid and electric vehicles to meet the changed expectations and address a sustainable future,” says Saket Mehra, Partner, and Auto & EV Industry Leader at Grant Thornton Bharat.
Mehra says that festive season contributes to 30-40% of the total annual sales. Hence, this season is very important for the automobile industry in India. However, there are several reasons which have affected the sales growth in this year: high inventory levels, weather-related disruptions, and regional elections.
SUV and Utility Vehicle Segments Driving Automobile Market Growth
Another very interesting take away from the same survey is that the UV and SUV segments have increased by 13% YoY in sales. Such vehicles are now selling for 65% of total passenger vehicles. While having started slow for FY25 at 0.5%, there is continuous demand for UVs and SUVs which indicates increasing consumer preference towards versatile, multi-purpose use vehicles.
For the first time in history, the industry inventory would touch high levels during September 2024; 7.9 lakh units worth Rs 79,000 crore remain unsold.
This has been a golden opportunity for automobile producers to attract customers. According to a survey conducted and released on Saturday, 90% say they will receive the festive discount.
Safety features are also becoming subscription-based
Besides the hybrid preferences, the study shows that subscription models have become popular among Indian customers. Such flexible ownership is suitable for the modern purchaser’s lifestyle, providing vehicle access without long-term ownership commitment.
Increasing demand for safety features is another notable trend and a shift in the consumer preference paradigm. “Design” and “performance” were once on the top of priorities lists, but advanced safety features now rule the roost. This increasing attention to vehicle safety speaks much about growing consumers and their desire for protection on the roads.
Conclusion
As Indian consumers begin to make way for both luxury as well as sustainable options, a new era of automobiles begins. Automakers now have to be proactive enough in offering a mix of hybrid, electric, as well as advanced safety options. The ongoing trend with the preference for versatile SUVs, along with consumer needs for safety and sustainability, reflects an ever-evolving market with a changing list of consumer expectations. Hybrid cars would be the stepping stone towards the adoption of EVs, while consumer-centric features would be the most prominent as the Indian automobile industry enters into a future that promises to be the most innovative and adaptive model ever.
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