Changing car buying trends of the Indian middle class over the years

10 years ago, small and mid sized cars accounted for 64% of all cars sold, however, today that has fallen to just 35%. There has been a decline in sale of 'middle class' cars.

BHPian DGSCS recently shared this with other enthusiasts.

Hi all,

Just came across an interesting read on the quint. Thought of sharing it with all of you as well.

The article essentially stated that a few years back buying a car as a middle class person with your first raise was almost a rite of passage. However, now young people are no longer getting good raises. Even white collar professionals who have risen to middle management are stuck with same salary packages for years coupled with the shooting car prices makes it difficult.

As per FADA, dealers across India have more than 7 lakh cars worth 70,000 crores lying unsold. This is twice the inventory they normally would like to hold. Link for source, which is not behind paywall.

10 years ago, small and mid sized cars accounted for 64% of all cars sold, however, today that has fallen to just 35%. There has been a decline in sale of 'middle class' cars.

Exact opposite is happening with cars bought by richer people with multi utility vehciles which made up just 18% car sales in 2013-14, shooting up to 57% last year.

Here's what BHPian JithinR had to say:

Though I am happy that at least some publications are going against this insane perception that car manufacturers have built of pieces flying off their dealer lots and insane waiting periods of years being normal.

Here's BHPian Fuldagap's reply:

Vehicle sales figures are a great indicator of the health of the economy.

Interestingly the FMCG sector has shown continuous decline too. Most companies registering a loss for past many quarters.

Meanwhile, here's what BHPian Sk8r added to the discussion: 

How could we ?

Even after paying so much tax, what do we get in return?

• Broken roads
• Additional toll
• Wrath of road rage and having to fend for ourselves
• High tax on fuel

Source : Cartoq

Here's what BHPian Motard_Blr had to say:

My wife who uses her car everyday mentioned she was tired of driving. So I asked her if it would help her if replaced her manual transmission car with an automatic transmission car. She refused saying that it's the traffic that's tiring. She doesn't mind the clutch and gears.

I commute to work by metro. The few times I've done the commute by motorcycle, I've regretted it.

So I can think of a few reasons why people don't buy new cars:

• terrible traffic
• no parking in many places
• high investment
• low return on investment in terms of pleasure of driving since most driving is inside the city
• working from home is more common
• since the pleasure from driving is not present, money is spent on other goods such as expensive home theaters or holidays that are perceived as high on experience factor.

The itch to replace the car was getting stronger until now. I think I'll hold on for as long as possible before replacing it. Bangalore traffic is only going to get worse with more flyovers and metro lines under construction. And when I do replace the car, I don't see myself spending big money on a big car for the above stated reasons.

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