“The Economist writes, all over India a growing middle class is rushing out to buy the ultimate expression of individualism”

Our Take with Doug Sheridan

The Economist writes, all over India a growing middle class is rushing out to buy the ultimate expression of individualism. The number of cars on India’s streets rose from 19 million in 2012 to 49 million in 2022. Car ownership per 1,000 people doubled 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, who drives a Porsche AG 718 Cayman GTS and is editor of Autocar India, a magazine. But as car-ownership has become more common, what it means to own one has changed.

One big shift is in what people are buying. Just five years ago, every second car sold in India was a hatchback. Today that is down to one in four, while more than 50% of new sales are SUVs, according to Hyundai Motor Company (현대자동차).

One reason SUV sales are booming is that most roads remain terrible. Even just outside the centre of a big city such as Bangalore, gaping potholes and barely surfaced roads remain common. And all over India overstretched road-traffic departments plonk down badly designed speedbreakers with little regard for vertebral or mechanical wellbeing. Ground clearance—or the height between the street and the bottom of a vehicle—is a crucial consideration for car-buyers in India.

At the same time, the SUV boom is also driven by vastly improved roads—in recent years India has added tens of thousands of kilometres of high-quality motorways. That has driven a surge in weekend and day-trips.

"India is “a country that loves travelling [and] the cheapest holiday in India today is the driving holiday,” says Anand Mahindra of Mahindra and Mahindra, a carmaker that specialises in SUVs. “Plus the fact that you have very large families that need larger cars.”

The surge in car-ownership and in ever bigger cars is not without its downsides. Honking is pervasive. Rule-breaking is endemic and getting worse. More intractable is congestion. Most Indian cities do not have road networks robust enough to support all the vehicles now competing for street space. Even so, it is unlikely that a country that for decades dreamed of car-ownership will forgo those aspirations.

Our Take 1: The Economist won't say it, but we will—the fact that Indians are both driving more and favoring SUVs flies in the face of the unrealistic hopes that fast-growing India... the world's largest country by population... will skip over the internal combustion vehicle and go straight to EVs. That's clearly not happening.

Our Take 2: According to Reuters and data from John Kemp, demand for petroleum products in India is growing at nearly 5% annually. That's big. Consumption of diesel fuel is particularly notable, no doubt driven by the growing fleet of SUVs on the roads.

Our Take 3: SUVs in India are just more evidence that the people of developing nations will not have their lifestyle choices dictated to them by climate elites. Count on it.