While supply-chain issues have affected a raft of vehicle manufacturers, counterintuitively, models priced higher than the entry level have continued to find buyers, as per a Crisil report.Last fiscal, cars priced above Rs 10 lakh (or the premium segment) sold 5x faster than those with lower sticker prices, and notched up approximately 38% on-year growth compared with approximately 7% y-o-y growth for the latter. Consequently, the market share of premium cars rose 500 basis points (bps) to ~30%, said the Crisil report.A stark difference in income sentiment of the respective target consumers, a sharper rise in the prices of lower-end cars, fewer options (some manufacturers exited the segment), and a slew of new launches that have increased the preference for higher-priced cars.In India, typically, lower-priced cars are bought by first-time users or those upgrading from used cars. With the pandemic impacting the income sentiment significantly for entry-level car buyers, purchases and upgrades have been getting postponed.CRISIL Research estimates the employee cost of large and medium companies — a proxy for income sentiment among affluent buyers of the higher-priced car — has increased way more than those of small and medium-sized companies, which typically account for a larger proportion of lower-priced car buyers.On top of muted income sentiment, there has been a 15-20% cumulative increase in the sticker price of lower-end cars over the past 4 fiscals due to increased stringency of safety regulations (mandating ABS, front-row airbags, speed warning alarms, seatbelt reminder, rear parking sensors, crash test norms) and the transition to BS-6 emission norms. These have been a drag on sales too.To boot, consumer preference has been gradually shifting from low-priced models that did well previously to similarly priced UVs. Some are even preferring to buy a used car in the costlier segment than spend an equivalent amount for a lower-segment.Maruti’s Alto, Swift, Baleno, Vitara Brezza, Celerio, and Dzire; and Hyundai’s i10 and i20 (which cumulatively accounted for ~56% of the lower-priced cars sold in fiscal 2019) have been on a decline for three fiscals now. The upshot is that, there were only ~39 models of lower-priced cars available last fiscal versus ~54 in fiscal 2016, said the report.Additionally, the lower-priced cars segment had little to show with new launches since fiscal 2020 contributing to only ~15% of volume share within lower-priced cars in fiscal 2022.But the drive was different for higher-priced cars. Best-selling models such as Hyundai Creta, Maruti Ertiga and Ciaz, Mahindra Bolero and Scorpio, Honda City, Ford Ecosport and Toyota Innova (which cumulatively accounted for ~68% of the higher-priced cars sold in fiscal 2019 have witnessed a decline in sales since fiscal 2019.