According to a survey released on Wednesday, the Indian automobile sector increased its value by 19% in FY24 over the previous year as more individuals purchased utility vehicles (UVs) and sport utility vehicles (SUVs).

Furthermore, as per the consultancy firm Primus Partners' report titled 'India Automobile Value Report - II', the number of vehicle registrations made the country the world's third-largest automobile market, trailing only China and the United States. India's average automobile price remains inexpensive when compared to more advanced economies.  In 2023, the global car sector saw a 12% increase in vehicle sales.

In FY24, India's UV and SUV segment increased by 23% in volume and 39% in value, owing to consumer preferences for higher-end vehicles, hybrid powertrains, automatic transmissions, and premium features such as sunroofs. The trend resulted in a 16% increase in the average price of UVs and SUVs.

"The value of India's vehicle sector is expanding faster than the number of units produced. Customers demand higher quality and more feature-rich vehicles," explained Anurag Singh, managing director of Primus Partners. 

The passenger vehicle (PV) segment experienced a 9% fall in volume. Despite a 5% price rise, the total PV value decreased by 4%. The two-wheeler (2W) segment grew by 10% in volume and 3% in price, resulting in a 13% increase in value.

The three-wheeler (3W) market experienced a 16% increase in volume, with an 8% increase in price resulting in a huge 24% increase in value. The commercial vehicles (CV) segment expanded by 3% in volume and 4% in price, resulting in a 7% increase in value.

India produced 280 million vehicles in FY24, with two-wheelers accounting for 76% of the total. Four-wheeler passenger cars generated the biggest value share, accounting for 63% of the industry's Rs 10.2 trillion value. Notably, whereas UVs accounted for only 10% of manufacturing volume, they generated a considerable 46% of overall industry value.

What were the main growth drivers in the automobile industry?

UVs and SUVs are popular among consumers due to their larger interiors, higher sitting positions, and improved ground clearance, which make them ideal for Indian road conditions.

The report also emphasized the dynamic nature of the Indian vehicle market and its potential for future expansion, particularly in the UV and SUV categories. With rising consumer preferences for premium features and higher-end automobiles, the shift toward EVs and Hybrids is expected to continue this fiscal year as well.

Singh predicted that volume growth in most industries would be limited in FY25. "The price growth is likely to be strong as customers are preferring higher specification vehicles," he stated.