Meanwhile, 34 % continue to prefer petrol-powered vehicles, underscoring the market's transitional nature. Grant Thornton Bharat's latest survey, Shifting Gears: Understanding Passenger Vehicle Market Trends, reveals significant shifts in consumer preferences during the festive season, indicating a transformation in India's automotive landscape.
With 85 % of respondents expressing an interest in premium vehicles and a notable rise in the preference for hybrid vehicles over electric vehicles (EVs), the survey marks a turning point for the industry.
Consumers are now exploring both luxury and sustainable options, signalling a new era for the Indian automotive sector.
The survey highlights that 40 % of respondents favour hybrid vehicles, a significant increase from previous years, compared to just 17 % opting for EVs.
Meanwhile, 34 % continue to prefer petrol-powered vehicles, underscoring the market's transitional nature.
The growing inclination toward hybrids suggests that while consumers are exploring sustainable alternatives, many remain cautious about fully committing to EVs, largely due to the need for more robust charging infrastructure and incentives.
Consequently, hybrid vehicles are expected to play a crucial role as a bridge technology, helping familiarize consumers with alternative powertrains and paving the way for future EV adoption.
Saket Mehra, Partner and Auto & EV Industry Leader at Grant Thornton Bharat remarked, "Despite these challenges, early October sales--showing a 30-35 % increase in registrations compared to September--offer encouraging signs. As market dynamics evolve, automakers must align with shifting consumer preferences, such as the growing demand for premium vehicles and increasing engagement through digital channels."
Mehra, "With consumers also expecting substantial discounts this festive season, the industry has a unique opportunity to drive demand. In the long term, economic growth and rising disposable incomes will further strengthen the outlook for India's passenger vehicle market."
Utility vehicles (UVs) and sports utility vehicles (SUVs) continue to dominate the market, with a 13 % year-on-year growth, now accounting for 65 % of passenger vehicle sales.
Despite a muted first half of FY25, where overall domestic sales rose by just 0.5 % , the sustained demand for UVs and SUVs demonstrates the ongoing consumer shift towards versatile vehicles.
However, inventory levels pose a challenge, with 7.9 lakh units worth Rs 79,000 crore stockpiled as of September 2024.
Leading automakers like Maruti Suzuki, Tata Motors, and Mahindra & Mahindra are introducing subscription models to cater to younger consumers who prefer flexibility over traditional ownership.
As digital engagement grows, automakers are merging physical and digital experiences to improve customer journeys, combining online research tools with offline test drives and dealership interactions.
Increasing consumer awareness is driving a shift in focus toward vehicle safety. Advanced safety features have become a top priority for buyers, surpassing traditional factors such as design and performance.
With only 30 million Indians currently able to afford a vehicle, there is substantial room for growth in the passenger vehicle market, as rising disposable incomes make car ownership more accessible.
Nearly 90 % of respondents expect significant festive season discounts. Car manufacturers are responding with attractive offers, exchange programs, and financing options to stimulate demand.
To learn more about the electric vehicle ecosystem and meet the key industry leaders, click here.
