India's passenger vehicle (PV) market is poised for a robust festive season boost as Deepawali approaches, fuelled by policy reforms like GST 2.0 that have enhanced affordability and shifted consumer preferences toward sustainable and premium options. A Grant Thornton Bharat survey, "Festive Drive: What Consumers Want in Their Next Ride", conducted among over 2,800 respondents across diverse cities and age groups, reveals that 41 percent are planning vehicle purchases within the next 3-4 months.

Notably, 72 per cent had deferred buying in anticipation of GST rationalisation, underscoring how the simplified taxation regime—reducing rates on small cars from 28 per cent to 18 per cent—could slash acquisition costs by up to INR 1 lakh, particularly benefiting buyers in Tier 2 and Tier 3 cities. This optimism aligns with a 34 per cent year-on-year growth in PV retail during Navratri 2025, driven by new launches, upgrade demand, and stable interest rates amid rising disposable incomes. Government incentives for electric vehicles (EVs) and hybrids further bolster this momentum, reflecting a maturing market where evolving lifestyles and digital savvy are reshaping mobility choices.

The survey highlights a marked tilt toward hybrid vehicles, with 38 percent of respondents favouring them over petrol (30 percent), EVs (21 percent), and diesel (8 percent), indicating a transitional preference for fuel-efficient technologies amid state-level road tax waivers in regions like Delhi and Uttar Pradesh. SUVs maintain dominance, preferred by 64 percent, accounting for 65 percent of FY25 sales—up from nearly 50 percent two years prior—driven by aspirational urban buyers seeking versatile, feature-packed rides.

Safety has emerged as a top priority for 34 per cent, eclipsing price and mileage, thanks to heightened awareness from crash tests and advanced features like ADAS. Premiumisation is accelerating too, with over 35 per cent willing to splurge on high-end variants and 65 per cent accepting a 10-15 per cent price premium for added luxuries, signalling a shift from budget constraints to value-driven decisions in a post-pandemic economy.

Digital channels are revolutionising the buying journey, with 52 percent blending online and offline research; social media influences 35 percent during discovery, while car apps guide 23 percent. This hybrid engagement model empowers informed choices, amplified by OEMs' targeted campaigns. Saket Mehra, Partner and Automotive Industry Leader at Grant Thornton Bharat, emphasised, "This festive season signals deeper shifts in consumer behaviour.

The growing preference for hybrids, rising safety consciousness, and willingness to pay for premium features reflect a more informed and aspirational buyer." With GST 2.0 unlocking pent-up demand and hybrids bridging the EV adoption gap, the sector anticipates a 30-40 per cent sales uptick during festivals, mirroring successes in states with proactive incentives.

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As original equipment manufacturers (OEMs) and dealers capitalise on these trends, the focus is on tailored financing, engaging digital experiences, and feature-rich models to woo next-gen buyers. This surge not only revitalises the INR 10 lakh crore PV industry but also positions India as a global mobility hub, where policy agility meets consumer evolution for sustained growth.

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