Bangalore Leads India’s Car Ownership Boom Amid Growing Traffic Woes

Bangalore, often dubbed India’s startup capital, is a city of contrasts. While arriving at the city’s new, garden-themed airport terminal offers a seamless and pleasant experience, navigating its congested roads is another story.

The city tops India’s list for traffic gridlock, with average speeds of just 18 kph (11 mph) during rush hour, according to TomTom, a navigation technology firm.

Despite this, Bangalore residents are purchasing vehicles at an unprecedented rate. The number of registered cars in the city surged from 2 million in April 2020 to 2.4 million in April 2023, overtaking Delhi as the city with the highest number of private cars. A new car is added to Bangalore’s streets every four minutes, and this trend is only expected to grow.

Car Culture In India Grows

Across India, a booming middle class is embracing car ownership as a symbol of individualism and success. From 19 million cars in 2012 to 49 million in 2022, the number of cars on Indian roads has more than doubled.

Car ownership per 1,000 people has also increased from 17 to 34 in the same period. “The love affair with cars in India, at this moment, is at an all-time high,” says Hormazd Sorabjee, editor of Autocar India.

However, as more people own cars, what it means to own one has evolved significantly.

Rise Of SUVs: A Shift In Consumer Preferences

One of the most notable shifts in car-buying behavior is the growing preference for SUVs. Five years ago, hatchbacks dominated the market, making up half of all car sales in India. Today, however, they account for just one in four, while more than 50% of new car sales are SUVs, according to Hyundai Motor.

This change is partly driven by the state of India’s roads. Even in urban centers like Bangalore, poor infrastructure with potholes and uneven surfaces makes SUVs, which offer higher ground clearance, an appealing option. Additionally, India’s improved network of highways and expressways has led to a rise in weekend road trips, further boosting demand for SUVs. Anand Mahindra, Chairman of Mahindra and Mahindra, which specializes in SUVs, explains, “India is a country that loves traveling, and the cheapest holiday in India today is the driving holiday.”

Safety & Value: New Priorities For Indian Car Buyers

Another significant shift in the Indian car market is the growing importance of safety. Until recently, safety wasn’t a major consideration for most car buyers.

However, the Tata Nexon, a compact SUV, became the first Indian car to receive a five-star safety rating in international tests. Its success has prompted a wider focus on safety features. Buyers are increasingly willing to overlook certain shortcomings if the vehicle offers better protection on highways where speeds of up to 120 kph are possible.

Additionally, there has been a noticeable shift from seeking purely budget-friendly options to valuing overall experience. The average car price has increased by 33% over the past five years, with buyers willing to spend more on larger, safer, and more feature-rich vehicles.

In some segments, the top-end variants now account for two-thirds of sales, up from less than half before the pandemic.

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