Car Sales Growth Hits a Four-Year Low in 2024

NEW DELHI: The automotive industry experienced a significant slowdown in 2024, with car sales growth decelerating to approximately 5%, marking the slowest pace of expansion in four years. This downturn underscores the mounting pressures faced by companies in urban markets.

Early estimates indicate that the industry concluded 2024 with sales of around 4.3 million units, a slight increase from 4.11 million units in 2023. This growth was largely driven by SUVs, which accounted for 54% of total sales.

While some industry insiders view the 5% growth as a positive indicator, considering the high base of the previous year, others anticipate that the pressure on companies will persist into the new year. "The industry is hopeful for incentives in the upcoming budget and believes that a reduction in income tax rates could stimulate consumption," stated a company executive.

Throughout much of 2024, demand remained lackluster, prompting companies to implement substantial price cuts and aggressive discounts to boost sales, particularly towards the year-end. The significant increase in car prices over the past few years, attributed to statutory safety and emission requirements, has led to a decline in vehicle affordability, further dampening demand.

Despite these challenges, Maruti Suzuki achieved its highest-ever annual sales, benefiting from strong penetration into the rural market. Partho Banerjee, Senior Executive Officer (Marketing & Sales), revealed that the company sold 1.79 million units in 2024, up from 1.74 million units the previous year. "We've seen growth across all segments, not just in SUVs, where we now hold a 27% market share," Banerjee commented.

Hyundai India reported a near-flat year with a 1% growth, selling slightly over 600,000 units. "Despite the industry's strong headwinds, Hyundai has maintained its sales momentum in 2024," said Tarun Garg, Director and COO of the company.

Tata Motors surpassed 560,000 units in sales, with Shailesh Chandra, MD (PV and Electric Mobility), attributing the demand to SUV sales. "The passenger vehicle industry saw moderate growth in 2024, with the SUV segment experiencing strong growth and sustained interest in emission-friendly powertrains. For Tata Motors, 2024 marked the fourth consecutive year of record annual sales, with significant growth in our SUV portfolio and a 77% increase in CNG volumes," Chandra explained.