The paper discusses the major limitations of the existing speed–area occupancy curve for multi-class traffic. Any driver will react not to the actual area occupancy, but to a perceived area occupancy based on the spatial arrangement and percentage composition of vehicles. To address multi-class traffic peculiarities, this paper proposes a formulation for perceived area occupancy. Traffic flow is simulated on a road section using a calibrated microsimulation model for Electronics City, Bangalore, India. The speed–concentration curves are plotted for various functional forms using density, area occupancy, and perceived area occupancy. Analysis results showed that the speed–perceived area occupancy curve could capture the speed variation better than by the existing functional forms and could predict traffic flow significantly better than with that by speed–density curves when used with the fundamental equation of traffic flow. © 2021 Informa UK Limited, trading as Taylor & Francis Group.