India's passenger vehicle (PV) market is shifting towards higher-priced models and alternative fuel technologies as consumers place greater emphasis on features, operating costs and efficiency. Deloitte India's latest Wheelwatch auto sector tracker found that the Rs. 1.2 mn-2 mn segment recorded the strongest sales growth in Q2 FY27, while electric vehicles (EVs) and compressed natural gas (CNG) models gained ground against petrol-powered vehicles. The Rs. 1.2 mn-2 mn segment grew 33.6 per cent year on year in Q2 FY27 and increased its market share by 1.2 percentage points. The Rs. 0.7 mn-1.2 mn category, which accounts for nearly half of passenger vehicle sales in India, contracted 0.4 per cent. Deloitte linked the shift partly to improved affordability following the GST 2.0 changes, which encouraged buyers to consider more expensive models without entering the luxury segment. Passenger vehicle wholesale volumes rose 30.7 per cent year on year to approximately 1.4 mn units during the quarter, accelerating from 25.9 per cent growth in Q1 FY27. Sub-compact and compact SUVs led the expansion, recording growth of 31 per cent and 53.1 per cent, respectively. Retail sales grew 22.2 per cent, pointing to a gap between manufacturer dispatches and customer purchases. Petrol's share of registrations declined 2.8 percentage points sequentially to 42.6 per cent, while diesel, EVs and CNG increased their shares. EV registrations nearly doubled year on year to approximately 97,000 units, taking penetration to 6.7 per cent from 6 per cent in the previous quarter. CNG registrations rose about 50 per cent to 233,000 units and exceeded petrol volumes in Gujarat, Haryana, Maharashtra and Rajasthan. Compact SUVs gained 3.3 percentage points in market share as manufacturers introduced feature-rich models with advanced infotainment and driver-assistance systems. Meanwhile, mid-size SUVs lost 1.9 percentage points amid competition from compact models and pre-owned premium vehicles. Dealer inventory increased from 33-35 days at the end of July to 43-45 days by September-end, nearly twice the recommended 21-day level, making inventory conversion important for sustained retail demand.