The first half of FY 24-25 witnessed tepic growth in the Indian passenger vehicle segment. Out of all PVs selling, SUVs continue to be the most-picked body style. One of the recent surveys by Grant Thornton has revealed interesting facts about the market and consumer trends in the segment. One of its key revelations is that buyers these days, prioritize safety features over mileage and costs when on the hunt for a new vehicle.
India’s own new car safety assessment program BNCAP is now being used to assess the safety of vehicles. The awareness about this and about vehicle safety at large, is on the rise among the public. The report says that 32% consider advanced vehicle safety a more important decisive factor than features/designs, performance, or price for that matter when they are out to buy a new car.
Most customers are willing to spend slightly more for a safer car. The study collected data from 3,500+ respondents, collected across age groups and occupations.
People are becoming increasingly aware of the Bharat NCAP and their trust in the assessment program is shooting up. It was in August last year that the BNCAP was officially launched in India. Ever since, several car and SUV models have been tested under it. Vehicles such as Tata Nexon, Punch, Safari, and Harrier have received 5-star ratings in Bharat NCAP’s crash tests. The strong sales and demand for these further underline the findings of the Thornton report.
It also speaks about consumer preference shifts in choosing vehicle powertrains, automotive financing, and traction in various automotive segments.
Buying Trends Among EVs and Hybrids
The report says that 40% of the respondents preferred to purchase hybrids in the last two years. This surpassed the demands for petrol, all-electric and diesel powertrains which stand at 34%, 17%, and 8% respectively. This preference seems to have accelerated by tax relaxations and exemptions on strong and plug-in hybrids by states like UP.
Tax cuts have a levelled the ground for hybrids in these states, and in fact, are benefitting the consumers as well. These have made prices fall so well, that it makes sense to go strong-hybrid now than ever. There is now near parity in prices between hybrids and regular powertrains, in the OTR prices.
People Are Buying More Premium Models
It also says that more than 40% of new car and SUV purchases are ‘upgrades’ instead of sideward movements. This reportedly shows rising disposable incomes for people. Digital media has also lured people into purchasing premium and high-end car and SUV models, with the influence rising from 56% to 74% in the last two years. Over 85% of the respondents were ready to experience purchasing and owning a high-end premium car/SUV.
Even within variants, people now seem to upscale and go for the top-spec and higher trims. 65% were ready to buy higher and top spec variants of the same model. They were ready to spend 10-15% more money than the base-spec to experience the vehicle in the best form they could. However in case of vehicles with huge differences between the base and top variants, the number was recorded to be smaller.
“With growing interest in premium models and hybrid vehicles, suggests a shift in consumer preferences, further shaping the outlook for the festive season,” stated Saket Mehra Partner and Auto & EV Industry Leader, Grant Thornton Bharat.
