Passenger vehicle volumes are expected to grow by 5-7 per cent, touching a new peak for the third straight time in the next fiscal, driven by the SUV segment, credit rating agency Crisil said.

This anticipated growth is expected to come on the back of an estimated high base of 6-8 per cent this financial year even as demand for cars and exports remain muted, it said.

A significant change in consumer preference has cranked up demand for SUVs, leading to its market share doubling to around 60 per cent of total domestic volumes this fiscal from around 28 per cent before the pandemic in fiscal 2019, the ratings agency said.

“While the overall PV volume is seen rising 5-7 per cent next fiscal, we expect demand for SUVs to accelerate at twice the pace at over 12 per cent, driven by an array of feature-laden launches at competitive price points, varied technology options, including hybrid and electric, and increased access to credit,” said Anuj Sethi, senior director at Crisil Ratings.