Demand was lackluster for much of 2024, forcing automakers to rely on aggressive price cuts and discounts to boost sales, particularly toward the end of the year.The growth in car sales slowed to just 5% in 2024, marking the slowest pace in four years and highlighting challenges in urban markets, ToI reported. According to preliminary estimates, the automobile industry sold around 43 lakh vehicles in 2024, compared to 41.1 lakh units in 2023. The growth was primarily driven by the popularity of SUVs, which made up 54% of total sales.
While some automakers expressed optimism about the 5% growth rate given the high sales base of previous years, others are bracing for continued challenges in the year ahead. "The industry now hopes for incentives in the budget, and feels that a cut in income tax rates – if it happens – will fuel consumption," a company executive said.
Car sales: Urban weakened and pricing pressures
Demand was lackluster for much of 2024, forcing automakers to rely on aggressive price cuts and discounts to boost sales, particularly toward the end of the year. Rising car prices—caused by the implementation of stricter safety and emission regulations in recent years—have negatively impacted vehicle affordability. This trend has added to the pressure on urban sales, where growth has been slow.
Maruti Suzuki: A record year despite challenges Despite the overall slowdown, Maruti Suzuki achieved its best-ever annual sales in 2024, benefiting from robust rural demand. The company sold 17.9 lakh units in 2024, up from 17.4 lakh in 2023.
"We have managed to realise growth across segments, and not just in SUVs where we now have a share of 27%," said Partho Banerjee, Senior Executive Officer (Marketing & Sales).
Hyundai car sales: Resilient despite flat growth For Hyundai India, 2024 was a year of near-flat performance, with sales growing by just 1%. The company sold slightly over six lakh vehicles during the year."Hyundai has managed to sustain sales momentum in 2024, despite strong headwinds faced by the industry at large," said Tarun Garg, Director and COO.
Tata Motors car sales: SUV demand fuels growth
Tata Motors recorded sales of over 5.6 lakh units in 2024, marking its fourth consecutive year of record-breaking annual sales. Shailesh Chandra, Managing Director of Passenger Vehicles and Electric Mobility, credited the growth to the rising popularity of SUVs and CNG-powered vehicles.
"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%," Chandra said.
The industry's expectations for 2025 hinge on government policy. Many automakers are looking to the upcoming budget for incentives, including potential cuts in income tax rates, which they believe could drive consumption and improve affordability. However, the ongoing challenges of rising costs and urban market stagnation may continue to weigh on sales growth in the near term.
The car industry’s focus remains on maintaining momentum in rural markets and leveraging the strong demand for SUVs to counterbalance the broader market slowdown. Companies hope that a favorable policy environment and strategic pricing initiatives will help them navigate the challenges ahead.
