Sales weren't in high gear in 2024, but the country's premium vehicle segment is expected to thrive and lead the growth charts
A workers loads a Maruti Suzuki Fronx car model on a train at the Maruti Suzuki Hansalpur plant, some 80 km from Ahmedabad
Image: Sam Panthaky / AFP
The year 2023 was spectacular for India’s automobile sector: 2024, perhaps not so much.
Sales weren’t in high gear, with total domestic passenger vehicle sales between April and November growing marginally at 1 percent. Of this, car sales fell 12 percent during the period, while utility vehicle sales grew by 12.9 percent. SUVs account for more than 60 percent of the country’s vehicle sales, which is only expected to grow stronger in the coming years, in line with a global trend.
“The domestic automotive industry recorded robust growth trends across segments in FY23, aided by a low base, recovery in economic activities, and increased mobility,” brokerage firm LKP Research said in a statement. “Following a period of robust growth and a relatively healthy base across automotive segments, the pace of growth has moderated in FY24, and the trend is expected to continue in FY25 as well.”
Despite that, the country’s premium vehicle segment is expected to thrive and lead the growth charts. At the same time, entry-level variants are likely to see diminished demand due to a downturn in both rural and urban markets. Entry-level vehicles have been becoming more expensive, even as the rural economy sees a downturn, leading to a decline in sales at the lower end of the spectrum.
“The under-₹10 lakh segment, at one point, accounted for 80 percent of the cars sold in India, but that number is not growing,” RC Bhargava, chairman of Maruti Suzuki, said in October. “This trend could continue. Unless the lower end of the market grows, there are no feeders to the upper segment.”
(This story appears in the 10 January, 2025 issue of Forbes India. To visit our Archives, click here.)