Consumers are exploring both luxury and sustainable alternatives, setting the stage for a new era in the Indian automotive sector, according to a survey by Grant Thornton Bharat.
As per the survey -- 'Shifting Gears: Understanding Passenger Vehicle Market Trends', 85 per cent of the respondents were considering premium models and there is an increasing preference for hybrid vehicles over electric vehicles (EVs).
The survey gathered insights from over 3,500 respondents across the country.
According to the survey, 40 per cent of respondents now prefer hybrid vehicles, compared to only 17 per cent favouring EVs.
In contrast, 34 per cent still lean toward petrol vehicles, reflecting the transitional nature of the market, it said.
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This growing alignment with hybrids suggests that consumers are exploring sustainable options, while waiting for more robust EV infrastructure and incentives, the survey found.
Therefore, with hybrid vehicles gaining traction, they are expected to act as a bridge, building consumer familiarity with alternative technologies and ultimately accelerating future EV adoption, it opined.
This trend underscores the need for automakers to focus on both hybrid and electric solutions to meet evolving consumer expectations and prepare for a sustainable automotive future, as per the survey findings.
"As market dynamics evolve, automakers must adapt to shifting consumer preferences," Grant Thornton Bharat Partner and Auto & EV Industry Leader Saket Mehra said.
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Elaborating on further findings, he noted that the festive season, which typically accounts for 30-40 per cent of annual sales, is critical for the Indian automotive industry.
However, high inventory levels, weather disruptions, and regional elections have tempered growth this year, he added.
The utility vehicle (UV) and sports utility vehicle (SUV) segments have continued to drive the market, witnessing 13 per cent year-on-year growth and now making up 65 per cent of passenger vehicle (PV) sales, he said.
Despite a muted first half of FY25, with overall domestic sales rising by just 0.5 per cent, the sustained demand for SUVs and UVs reflects the growing consumer preference for versatile vehicles, Mehra said.
However, inventory levels remain a challenge, with 7.9 lakh units worth Rs 79,000 crore stockpiled as of September 2024, he added.
Automakers have an opportunity to meet rising consumer demand through substantial festive discounts, with nearly 90 per cent of respondents expecting such offers, Mehra said.
The survey also found that subscription models launched by companies are also gaining traction.
Besides, there is an increased demand for safety features in the car models.
Growing consumer awareness has shifted the focus to vehicle safety, with advanced safety features becoming a top priority for buyers, overtaking traditional factors like design or performance, it said.
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