Mordor Intelligence has published a new report on the India Passenger Car Market, offering a comprehensive analysis of trends, growth drivers, and future projections.
India Passenger Car Market Overview
The India passenger car market is on a steady growth trajectory, with projections indicating a market size of USD 42.72 billion in 2025. This growth is expected to continue, reaching USD 53.04 billion by 2029, reflecting a compound annual growth rate (CAGR) of 5.56% during the forecast period. The market’s expansion is influenced by several factors, including shifting consumer preferences, advancements in vehicle technology, and supportive government policies.
India Passenger Car Market Key Trends
SUVs Lead Market Share
Sport Utility Vehicles (SUVs) have become the dominant segment in India’s passenger car market, accounting for approximately 41% of the market share in 2024. Their growing popularity is fueled by features like higher ground clearance, a commanding driving position, and adaptability for both urban roads and rural terrain. The steady rise in demand is also supported by the launch of new models and the increasing availability of electric and hybrid options within the segment.
Rise of Electric Vehicles (EVs)
The Indian government’s initiatives, such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, have significantly contributed to the growth of the EV segment. The implementation of the Vehicle Scrappage Policy, aiming to phase out older, polluting vehicles, is expected to further boost EV adoption. With an ambitious target of having 30% of all cars in India electrified by 2030, the EV market is poised for substantial growth.
Technological Integration
The integration of advanced technologies in vehicles is becoming increasingly prevalent. Features such as connected car technologies, enhanced safety systems, and improved fuel efficiency solutions are now standard in many models. The expansion of charging infrastructure, with over 10,900 publicly available charging stations by 2022, supports the growing EV segment and enhances consumer confidence in electric mobility.
Consumer Financing Trends
The availability of affordable financing options has made vehicle purchases more accessible to a broader segment of the population. Auto loan interest rates have decreased, contributing to increased market activity and consumer confidence. This financial environment supports the growth of the passenger car market by making vehicle ownership more attainable.
India Passenger Car Market Segmentation:
Vehicle Configuration:
- Passenger cars
- Hatchback
- Multi-purpose Vehicle
- Sedan
- Sports Utility Vehicle
Propulsion Type:
- Internal Combustion Engine (ICE)
- By Fuel Category
- CNG
- Diesel
- Gasoline
- LPG
- Electric and Hybrid Vehicles (xEVs)
- By Fuel Category
- BEV
- FCEV
- HEV
- PHEV
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Key Players
Several major players dominate the Indian passenger car market:
- Maruti Suzuki India Limited: Leading the market with a 41.6% share in 2023.
- Hyundai Motor India Limited: Known for its wide range of models catering to various consumer segments.
- Tata Motors Limited: A homegrown manufacturer focusing on innovation and sustainability.
- Mahindra & Mahindra Limited: Specializes in SUVs and electric vehicles.
- Kia Corporation: A newer entrant making significant inroads with its stylish and feature-rich models.
These companies are expanding their production capabilities and investing in research and development to meet the evolving demands of the market.
Conclusion
The India passenger car market is experiencing significant growth, driven by factors such as the rising popularity of SUVs, the shift towards electric mobility, technological advancements, and favorable financing options. With continued government support and increasing consumer demand, the market is expected to maintain its upward trajectory in the coming years. As the industry adapts to changing preferences and technological innovations, it is well-positioned to meet the diverse needs of Indian consumers.
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