Consumers in India are increasingly exploring both luxury and sustainable alternatives in the automotive sector, according to a survey conducted by Grant Thornton Bharat titled “Shifting Gears: Understanding Passenger Vehicle Market Trends.”
The survey revealed that 85% of respondents are considering premium vehicle models, with a growing preference for hybrid vehicles, which now attract 40% of consumer interest, compared to just 17% for electric vehicles (EVs). In contrast, 34% of participants still favour petrol vehicles, highlighting the transitional nature of the market.
This trend indicates that while consumers seek sustainable options, they await more robust EV infrastructure and incentives. The rise of hybrid vehicles may serve as a bridge, familiarising consumers with alternative technologies and potentially accelerating future EV adoption.
Grant Thornton Bharat’s Partner and Auto & EV Industry Leader, Mr. Saket Mehra, emphasised the importance of adapting to changing consumer preferences as market dynamics evolve.
The festive season is critical for the Indian automotive industry, typically accounting for 30-40% of annual sales; however, challenges such as high inventory levels, weather disruptions, and regional elections have tempered growth this year.
Despite a muted first half of FY25, where overall domestic sales increased by just 0.5%, the demand for utility vehicles (UVs) and sports utility vehicles (SUVs) remains strong, with these segments experiencing a 13% YoY growth and constituting 65% of passenger vehicle sales.
With 7.9 lakh units worth US$ 9.40 billion (Rs. 79,000 crore) stockpiled as of September 2024, automakers can attract consumers through substantial festive discounts, as nearly 90% of respondents expect such offers. Additionally, a rising demand for advanced safety features in vehicle models reflects a shift in consumer awareness and priorities.
