India's Car Sales Growth Slows to 4-Year Low at 5% in 2024

Car sales growth in India decelerated to approximately 5 per cent in 2024, marking the slowest expansion in four years, as urban market pressures weighed on the industry. Early estimates indicate that the sector closed the year with sales around 4.3 million units, up from 4.11 million in 2023. The growth was primarily driven by sport utility vehicles (SUVs), which accounted for 54 per cent of total sales.

Industry leaders acknowledged the challenges but maintained optimism. “A 5 per cent growth rate is still a positive outcome, especially given the high base from previous years,” a company executive noted. However, many anticipate continued pressure in 2025, with hopes pinned on potential incentives in the upcoming budget. Industry insiders suggest that measures such as income tax reductions could stimulate consumer spending.

Throughout 2024, demand remained subdued for a significant period, prompting companies to offer substantial discounts and price cuts, particularly in the final months of the year. Rising vehicle prices, driven by mandatory safety and emission compliance costs, have affected affordability and dampened consumer interest.

Despite these challenges, Maruti Suzuki reported its highest-ever annual sales, reaching 1.79 million units in 2024, up from 1.74 million the previous year. The company’s strong performance in rural markets contributed significantly to its success. “We have achieved growth across all segments, not just in SUVs, where we now hold a 27 per cent market share,” said Partho Banerjee, senior executive officer for marketing and sales.

Hyundai India experienced a near-flat year, with a modest 1 per cent growth, selling just over 600,000 units. “Despite industry challenges, Hyundai maintained its sales momentum in 2024,” said Tarun Garg, the company’s director and COO.

Tata Motors, on the other hand, recorded over 560,000 unit sales, marking its fourth consecutive year of record-breaking performance. Shailesh Chandra, managing director for passenger vehicles and electric mobility, attributed the growth to robust demand for SUVs and eco-friendly powertrains. “The SUV segment and CNG vehicles saw strong traction, with CNG volumes increasing by 77 per cent,” Chandra noted.

As the industry moves into 2025, stakeholders are watching for government policy decisions that could influence consumer spending and market dynamics. With affordability remaining a concern and urban demand under pressure, companies are hopeful that favorable budgetary measures will provide much-needed relief and fuel growth in the coming year.