KOCHI: Car buyers in the state seem to be coming of age as there is a noticeable trend of increasing consumption of premium vehicles over base models. From a state that mostly purchased budget-oriented, value-for-money cars, the shift is discernible with customers even willing to wait for their feature-rich dream wheels.
According to top car dealers in the state, the number of orders for premium cars, starting at Rs 12 lakh, has seen a notable increase compared to previous years. This surge in demand has resulted in a waiting period of 8 to 16 months, even for electric and hybrid vehicles.
“More than 86% of our customers are waiting for hybrid vehicles, which fall under the premium category. More people are now opting for top variants. Previously, customers were content with owning base-model vehicles, but now their preferences have shifted. They are highly interested in advanced technology and safety features, which are mostly available in the top variants.
Some customers are even willing to patiently wait to fulfil their dream of owning such a vehicle,” said Eldo Benjamin, senior vice president (sales and marketing) at Nippon Toyota. Kerala and Tamil Nadu together contribute a significant share of overall domestic premium vehicle sales in India. The two states accounted for 11.5% of overall sales in the first nine months of fiscal year 2021, as per a joint study by SIAM and Crisil.
Premjith Soman, vice president of sales, at Incheon KIA, said if earlier people wanted to buy from a specific branded company, now that has changed. “Now customers are asking about the number of airbags, driving assistance features, and other convenient features available in the car. They want to use the car as they are using their mobiles, which have all the latest features. The demand for premium cars has increased as people have started depending more on the features,” said Premjith.
Growth in revenue from vehicle regns
With the rising popularity of premium vehicles, there has been a corresponding increase in revenue generation. The state’s revenue from the same has shown a huge increase over the years. In 2021, the revenue amounted to Rs 3,614.04 crore, generated from the registration of 7.65 lakh vehicles. This amount further grew to Rs 4,753 crore in 2022, which came from the registration of 7.83 lakh vehicles. As of July 24, 2023, the government has received a revenue of Rs 2,840 crore from the registration of 4.13 lakh vehicles.
“Though the department is getting revenue as a compound fee, a major part of it comes through vehicle registrations. The government’s decision to collect the tax based on the value of the vehicle has resulted in higher revenue. For a vehicle that costs more than `20 lakh, a 20% tax has to be levied. The increase in revenue clearly shows that more premium vehicles are being registered in the state,” said B J Antony, a retired senior deputy transport commissioner.