When it comes to Utility Vehicles consumer choices and preferences have been changed and shifted to UVs. After all Utility Vehicles (UVs) offer better and more innovative designs, new models, and technological, functional and safety features. In such a scenario, Utility Vehicles (UVs) grew at a CAGR of 15.51% between FY13 and FY24.  

If talks about the volume growth of the Passenger Vehicles (PV) industry in FY25 then it is projected to be moderate on account of a high base effect from FY24. A shrinking order book and the expectation of persistently subdued demand for entry-level variants in FY25 were noticed.

According to a CareEdge Rating report, the PV segment is predicted to moderate volume growth of around 3-5% in FY25 after volumes grew by 7.4% in FY24.

However, the industry is composed to sustain its sales momentum, bolstered by the strong demand for new model launches and SUVs and the expectation of interest rate cuts in the second half of FY25.

“While the market for premium vehicles is predicted to thrive, driven by a surge in demand for luxury and high-end models, entry-level variants are likely to see continued diminished demand due to a downturn in both rural and urban markets,” said Hardik Shah, Director at CareEdge Ratings.

On the other hand, the rural sector is feeling the pinch because of the high cost of entry-level vehicles. At the same time urban consumers are increasingly going towards to choose for SUVs, reflecting a shift in market preferences, Shah added.

Utility Vehicles

Utility Vehicles (UVs) grew at a CAGR of 15.51% between FY13 and FY24 as consumer preference shifted towards UVs that offered better and innovative designs, new models, and technological, functional and safety features.

The UV segment has consistently outperformed the PV industry growth rate for the past decade. In FY24, for the first time, UV sales volume stood higher than Passenger cars and vans, the CareEdge report said.

It added that UVs currently account for over 55% of all new PV sales, and their share in overall PV sales is expected to rise further over the medium term.

Electric Vehicles

Electric Vehicle (EV) sales recorded 90% YoY growth in FY24 with volumes at 90,432 units. Analysts expect EV sales volume to surge to around 1.3 lakh - 1.5 lakh in FY25, led by improving penetration rate.