The market share of SUVs or sports utility vehicles is estimated to surpass 50% of the total automobile demand in the domestic market, according to the latest report by S&P Global Mobility.
The report titled 'Bigger and Greener: The Changing Landscape of Indian Mobility' states the total sales of light passenger vehicles are expected to grow to 6.1 million units in 2030 from 4.4 million in 2020, aided by the country’s economic growth and investment in the national highway network. This means that SUVs would account for more than 3 million units in the domestic automobile sector.
"Today, more than 40% of Indian light-vehicle sales are SUVs, reflecting consumer preferences for larger and more spacious rides. An increase in national highway construction has accelerated this trend," says Puneet Gupta, Director (India & ASEAN Automotive Sales Forecast), S&P Global Mobility.
As per the report, as of 2023, the share of SUVs has increased by a whopping 42% as against 16% in 2015. The share of hatchbacks witnessed the biggest decline from 41% in 2015 to 29% in 2023. The share of Sedan in the domestic automobile industry declined to 13% in 2023, from 24% in 2015. The country’s multi-purpose vehicle (MPV) share also saw a marginal decline of 1% to 12% in 2023 from 13% in 2015. Meanwhile, the share of Vans declined to 4% in 2023, as against 6% in 2015.
In July, the country's passenger vehicle sales stood at 3,52,492 lakh units, up 3.1% as against 3,41,971 units in the same period last year, driven by a growth in SUV segment. Among the domestic automakers, Maruti Suzuki, with a market share of 24.1% became the leading automaker in the SUV segment in July by selling 42,360 units, followed by Mahindra & Mahindra, which sold 36,205 units of SUVs. Tata Motors sold 6,329 units of SUVs during the month under review.
"India's mobility sector is on the cusp of a major transformation. Consumer aspirations are spurring a shift in vehicle sales toward SUVs, while environmental concerns are helping to fuel demand for alternative propulsion systems," says the rating agency.
Notably, the report also states that instead of individual car ownership, public mobility and shared vehicle services would be the most preferred options amongst customers going forward. The report attributes the challenges for urban infrastructure to be the primary reason behind this.
"Pollution and congestion could spur demand for public transportation in India. The nation has about 2 million buses on the road. Still, this is only about 1.2 per 1,000 people, which is notably less than in developed markets. This does provide massive headroom for growth," says S&P Global Mobility.
"We predict that shared mobility, such as ride-hailing services and car-sharing platforms, will gain further traction in India. Car subscription services — where consumers pay a monthly fee for access to a vehicle — are also gaining popularity. These developments reflect a focus on cost-effective and convenient transportation, along with changing consumer preferences," it adds.
The rating agency estimates that e-buses will rise to 9% of the total bus fleet by 2026 and 30% by 2030.
