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India's entry-level cars lose steam as buyers wait it out in inflation

Industry's shift to more expensive models and international chip shortage drag down volumes to a 7-year-low

used car, second-hand cars, auto demand, automobile, cars, vehicles
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The trend has led to a higher-than-natural skew toward higher-end vehicles, giving rise to a “partially false” notion of a sharp premiumisation trend at play in recent years

Shally Seth Mohile Mumbai
The economy segment of India’s car market is unlikely to revive soon term as inflation and prices prompt buyers to defer purchases.

The share of entry-level cars in the passenger vehicle market dropped to the lowest in seven years at the end of the Financial Year 2021-22 (FY22). A recovery in the segment will be largely driven by the overall economic growth, improvement in income levels, and easing of semiconductor shortage, say carmakers and analysts.

“There is a dramatic drop in the affordability factor for the hatches. A slew of regulations on safety and emissions coupled with the inflationary trends,

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First Published: May 22 2022 | 7:13 PM IST

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