Passenger vehicles became expensive by 50 percent in five years, prices increased the most in 2021-22
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Passenger Vehicles Expensive: In India, the prices of passenger vehicles have increased by more than 50 percent in the last five years. According to a data released by the automotive industry, the average selling price (ASP) of passenger vehicles has increased over the last few years due to premiumisation, increase in regulatory stringency and sharp growth in demand for sports utility vehicles (SUVs). Prices are continuously increasing. According to the data, the average selling price has increased from Rs 7.65 lakh in 2018-19 to Rs 11.5 lakh in 2023-24, an increase of more than 50 percent. Most people in India prefer to buy top-end variants of passenger vehicles. The percentage of such buyers has increased from 27 percent in a year to 43 percent now.
People want the most features in the car.
Shashank Srivastava, senior executive officer, marketing and sales, Maruti Suzuki India, said premiumisation is a clear change. People now want more features in their vehicles. They are choosing the model with more features in the same model. He said that now vehicles without AC no longer exist. There was a time when the demand for non-AC vehicles was high.
Average selling price increasing rapidly in auto industry
Tata Motors also seems to agree with the statement of Maruti Suzuki’s Shashank Srivastava. The company says that the average selling price is increasing rapidly in the entire auto industry. She said that we carefully consider a combination of many internal and external factors when deciding pricing to ensure financial viability and competitiveness in the market. He said that inflation, rising cost of raw materials, strength of the company, high security and emission standards are among its important factors. A significant part of the increase is the cost of raw materials. He said that the speed at which the prices of raw materials are increasing is partly being passed on to the customers.
Sharp jump in SUV sales
Shashank Srivastava of Maruti Suzuki further said that in the last five years, sales of SUV cars have increased faster than hatchback cars. This is a fundamental change, due to which the prices of passenger vehicles have increased. He said that in the calendar year 2023, wholesale sales of passenger vehicles crossed the record figure of 4.1 million. There were record sales of SUVs in this. A growth of 26 percent was recorded in SUVs on annual basis in 2023. The share of SUVs in passenger vehicle sales increased from 42 percent last year to 48.7 percent this year. In comparison, the share of hatchbacks declined from 34.8 percent in 2022 to 30 percent in 2023. At the same time, the share of sedan cars also decreased from 11 percent to 9.4 percent in 2022.
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