Summarize

Simplifying... Inshort

Automatic transmission (AT) cars are gaining popularity in India, especially in urban areas, with one in three cars sold in the top 20 cities being automatic.
Despite being pricier than manual cars, the demand for AT cars is rising due to factors like urbanization, increased disposable income, and a preference for convenience.
However, the reliance on imported automatic gearboxes is slowing down the adoption across all segments, although some manufacturers have started local production to make AT cars more accessible.

Was a long read? Making it simpler...

Next Article

AT cars account for 26% of India sales

Shifting to an automatic transmission car? You are not alone

By Dwaipayan Roy

Oct 13, 2024

10:18 am

What's the story

Despite being more expensive, an increasing number of Indian consumers are opting for automatic transmission (AT) cars over their manual counterparts. The trend is fueled by the demand for a smoother driving experience and improved fuel efficiency. According to data from Jato Dynamics, AT cars now make up for almost 26% of mass-market vehicle sales in India, up from 16% in 2020.

Urban preference

AT cars are popular in urban areas

The demand for AT cars is especially high in urban and metro markets, where traffic congestion is a common issue. In India's top 20 cities, one out of every three cars sold is now an automatic. The trend continues even though these vehicles are priced between ₹60,000 to ₹2 lakh higher than their manual counterparts.

Market adaptation

Market responds to rising demand for AT cars

The growing demand for AT cars is evident in the market's offerings, with 83 models now available with AT options. Leading brands such as Maruti Suzuki, Toyota, Tata Motors, Mahindra, Hyundai and Kia are investing in advanced technologies to expand their AT offerings. For Honda Cars India, automatic vehicles already account for over half of its total sales in the country.

Broad acceptance

AT adoption spans across age groups, markets

The shift toward automatic transmission isn't limited to any particular age group or market. It's being driven by factors like increasing urbanization, growing disposable incomes, and a rising preference for convenience. "With a significant share of sales coming from CVT models and with the growing shift toward AT, we can see a rise in its wider acceptance in the future as well," said Kunal Behl, Vice President of Marketing and Sales at Honda Cars India.

Import dependence

Import reliance slows adoption across segments

Despite the growing demand for AT cars, most Indian carmakers still import their automatic gearboxes. This dependence on imports contributes to higher costs and slows down AT adoption across all car segments, according to Ravi Bhatia, President at Jato Dynamics. However, manufacturers like Maruti Suzuki and Mahindra have begun local production of AMT units, making the automatics more accessible in the budget segment.