The Union Budget 2024 is around the corner and it will be the first time that the Budget will be presented in the parliament after NDA 3.0 came into power a few days ago. Ahead of the upcoming Budget presentation, which is expected to take place in the last week of July, it has been reported that the Indian automotive industry grew by 19% in the previous fiscal.
According to a report by Primus Partners, the value of the Indian automobile industry stood at Rs 10.22 lakh crore at the end of FY 2023-24, whereas at the end of FY 2022-23, the valuation of the industry stood at Rs Rs 8.2 lakh crore. The latest report offers valuable insights and trends for the fiscal year 2023-24.
While monetary valuation of the India automobile industry grew by 19%, volumes increased by 10% during the same period. This includes all segments— passenger vehicles (PV), commercial vehicles (CV), two-wheelers (2Ws) and three-wheelers (3Ws). However, the biggest takeaway from this report was the noticeable shift of consumers towards SUV (Sport Utility Vehicle) and UV (Utility Vehicle) segments.
Growing affinity towards SUVs, UVs
The SUV and UV segments combined grew by a massive 39% in FY 2023-24 over the previous fiscal in terms of overall valuation. This included 23% growth in volume, and 16% increase in prices of models during the same period. The average price increase in this segment was due to general rise in prices, shift to higher segment, shift to hybrid, shift to automatic transmission variants, popularity of sunroofs, and shift to EVs
This is more monumental when we consider that the PV segment declined by 9% in terms of volume in FY 2023-24. This subsequently resulted in a 4% drop in value. This proves that Indian buyers are moving towards larger and more expensive models with SUVs being favoured for the tall stance, better road presence, and higher ground clearance.
To give you some perspective, for the month of March and April this year, Punch was the highest-selling PV in India, which was a first for the market. Even in May 2024, out of the top 25 highest-selling cars in the country, 17 models were SUVs and UVs. This speaks volumes of the growing affinity for SUVs, MUVs, and crossovers in India.
