Small car sales 50% less than last year, cheap motorcycle sales 39% less than peak in 2018-19

The Indian car market has witnessed significant transformations and shifts in consumer preferences over the years. While small cars have long dominated the Indian automotive landscape, there’s a noticeable change in the air. In recent times, the market is experiencing a growing trend towards Sports Utility Vehicles (SUVs). These larger, versatile vehicles are becoming increasingly popular among Indian consumers.

Traditionally, small cars, especially those measuring under 3.6 meters in length, have been the go-to choice for Indian buyers due to their affordability, compact size, and fuel efficiency. However, the dynamics are evolving. In the second quarter of the ongoing fiscal year, small cars faced a substantial decline in sales, dropping to 35,000 units. This reflects a drastic 54.5% reduction from the 77,000 units sold during the same period in the previous year. This change in sales pattern is indicative of a significant shift in consumer preferences.

In contrast to the declining popularity of small cars, SUVs and MUVs (multi-utility vehicles) have been steadily on the rise. They contributed to 60% of all passenger vehicle sales in the September quarter. This surge in SUV sales signifies a changing automotive landscape, highlighting the appeal of larger, more feature-rich vehicles among Indian consumers.
The inclination towards SUVs can be attributed to various factors. Many SUV models offer more space, advanced features, better ground clearance, and a commanding road presence, making them a favored choice for those looking for versatile and comfortable vehicles. These attributes are particularly attractive to urban buyers who appreciate the practicality and style of SUVs.

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The shift in preference from small cars to SUVs also aligns with the changing demographics and rising income levels in India. As the country’s economy grows, more consumers are entering the middle-class segment, allowing them to consider larger and more luxurious vehicles like SUVs. However, the market’s landscape is not uniform, and the shift to SUVs also underscores the uneven economic recovery at the lower end of the income spectrum, particularly in the aftermath of the Covid-19 pandemic.

Entry-level motorcycles, often a preferred mode of transportation in smaller towns and rural areas, have seen a significant decline in sales. Nevertheless, it’s important to note that despite this changing trend, small cars and entry-level motorcycles remain relevant for certain consumer segments. Automakers and industry experts are closely observing these shifts and are likely to adapt their strategies accordingly.

The Indian car market is evolving, with SUVs gaining momentum and attracting a broader range of consumers. The future will likely see a coexistence of small cars, entry-level motorcycles, and SUVs as manufacturers strive to meet the diverse needs and preferences of India’s vast and dynamic consumer base.

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