India's entry-level cars lose steam as buyers wait it out in inflation

Industry's shift to more expensive models and international chip shortage drag down volumes to a 7-year-low

The economy segment of India’s car market is unlikely to revive soon term as inflation and prices prompt buyers to defer purchases.

The share of entry-level cars in the passenger vehicle market dropped to the lowest in seven years at the end of the Financial Year 2021-22 (FY22). A recovery in the segment will be largely driven by the overall economic growth, improvement in income levels, and easing of semiconductor shortage, say carmakers and analysts.

“There is a dramatic drop in the affordability factor for the hatches. A slew of regulations on safety and emissions coupled with the inflationary trends,