Car Sales Growth Slows To 5% In 2024, Marking Slowest Expansion In 4 Years

While many companies view the 5 per cent growth as positive given the high base, some expect continued pressure on the industry in the coming year

Demand remained tepid for much of 2024, prompting companies to offer substantial price cuts and aggressive discounts, especially towards the year-end

Source : PTI

Car sales growth slowed to approximately 5 per cent in 2024, marking the slowest expansion rate in four years and highlighting the challenges faced by companies in urban markets. Early estimates indicate that the industry concluded 2024 with sales of around 43 lakh units, up from 41.1 lakh units in 2023, with SUVs accounting for 54 per cent of the total sales.

While many companies view the 5 per cent growth as positive given the high base, some expect continued pressure on the industry in the coming year. "The industry now hopes for incentives in the budget, and feels that a cut in income tax rates - if it happens - will fuel consumption," said one company executive.

Demand remained tepid for much of 2024, prompting companies to offer substantial price cuts and aggressive discounts, especially towards the year-end. Rising car prices, driven by stricter safety and emission standards, have decreased the affordability of vehicles, further dampening demand.

Despite facing challenges, Maruti Suzuki achieved its highest-ever annual sales, driven by strong penetration into the rural market. Partho Banerjee, Senior Executive Officer (Marketing & Sales), told the Times of India that the company sold 17.9 lakh units in 2024, a slight increase from 17.4 lakh units the previous year. "We have managed to realise growth across segments, and not just in SUVs where we now have a share of 27 per cent," Banerjee said.

Hyundai India had a near-flat performance with a modest 1 per cent growth, selling just over six lakh units. "Hyundai has managed to sustain sales momentum in 2024, despite strong headwinds faced by the industry at large," noted Tarun Garg, Director and COO at Hyundai India.

Tata Motors sold more than 5.6 lakh units, with MD (PV and Electric Mobility) Shailesh Chandra attributing the growth to strong demand in the SUV segment. The PV industry posted moderate growth in 2024... with strong growth in SUV segment and sustained traction for emission-friendly powertrains. For Tata Motors, 2024 was the fourth consecutive year of highest-ever annual sales. We registered strong growth in SUV portfolio... and CNG volumes grew a substantial 77 per cent,” Chandra added.