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The Indian automobile industry’s value surged by 19% to ₹10.22 lakh crore in FY 2023-24, driven mainly by the SUV segment’s impressive 39% overall value boost. This growth was fueled by a 23% volume increase, a 16% rise in prices, and factors like rising input costs, a shift towards premium SUVs, and the emerging EV market.
Increased Demand for SUV: What’s the Reason?
In the financial year 2023-24, the Indian automobile industry experienced a notable transformation, marked by a substantial increase in demand for high-value vehicles, particularly SUVs. According to a report by Primus Partners, the industry’s value surged by 19%, reaching ₹10.22 lakh crore, despite a modest 10% rise in volume.
This impressive value growth is largely attributed to significant developments within the SUV segment. The segment saw a 23% increase in volume coupled with a 16% rise in price, resulting in an overall value jump of 39%. Several factors are driving this trend. Firstly, rising input costs have contributed to higher prices across the market, including for SUVs. Secondly, consumer preferences are clearly shifting towards premium SUVs within the segment.
Moreover, the growing appeal of hybrid and automatic transmission options, which are often associated with higher-end vehicles, is boosting the segment’s value. Additional features such as sunroofs are also becoming popular, enhancing the perceived value of SUVs.
The emerging electric vehicle (EV) market within the SUV segment is also playing a crucial role, with these vehicles typically commanding higher prices. These factors collectively depict an SUV market that is not only expanding in volume but also achieving higher price points, driving the overall value growth of the Indian automotive sector.
Anurag Singh, Managing Director of Primus Partners, highlighted India’s unique position in the global automotive industry. “India is shifting away from lower-priced products and focusing on feature-rich, higher-priced vehicles,” he remarked. This shift is driven by changing consumer preferences and a strong Indian economy. Notably, SUVs have emerged as the top choice for the majority of Indian car buyers.
