With some bumpy rides in 2024, auto industry expects favourable business climate in 2025

The Indian automobile industry in 2024 saw a dynamic landscape of growth, innovation and challenges. It remained a significant contributor to the economy, employing millions and generating substantial revenue. 

The industry experienced a year of bumpy rides for both passenger vehicles (PVs) and two-wheelers as the post-pandemic pent-up demand evaporated and the high base of the previous year demanded more effort to make sales grow. However, towards the festive season, both PVs and two-wheelers saw record sales versus the previous year. 

During the 42-day festive period this year, the PV sales grew by 7 per cent year-on-year (YoY) to 6,03,009 units as compared with 5,63,059 units in festival period of 2023 and likewise, two-wheeler sales also grew by around 14 per cent YoY to 33,11,325 units as compared with 29,10,141 units in corresponding period last year.

“It (2024) has been a relatively an average year in terms of growth rates over last year, primarily because of the government investments not being there, and also a bit of its layoffs,” Hardeep Singh Brar, Senior Vice-President and Head of Sales and Marketing, Kia India, said. But, despite several challenges, companies like Maruti Suzuki India for the first time, exceeded the 20-lakh production output milestone in a year, a feat achieved by no other Indian passenger vehicle manufacturer till now. 

 “The PV segment continued its steady performance led by sustained demand for sporty utility vehicle (SUV) segments and good adoption of new energy vehicles, such as electrics, hybrids and gaseous fuel vehicles. The auto industry also made significant strides to introduce newer models and vehicles with alternative power trains like hybrids, electrics, ethanol/ flex-fuel vehicles and CNG in 2024,” Rajesh Menon, Director General, Society of Indian Automobile Manufacturers (SIAM), said. 

In terms of policies also, 2024 saw several initiatives from Central and State governments to promote electric and hybrid vehicles...For electric two-wheelers too, the market witnessed an exceptional growth phase. “Government support through initiatives like the PM E-Drive scheme, alongside consumer demand for sustainable mobility, is fuelling this momentum. The rise of quick commerce, with its demand for faster and eco-friendly deliveries, has further boosted EV adoption,” Samarth Kholkar, CEO and Co-Founder at BLive (multi-brand EV platform), said...But, moving on the industry beginning 2025 with its biggest event – Bharat Mobility Global Expo – where advanced technologies like autonomous driving, vehicle intelligence, connected features and electrification will be reflected during the six-day event. It is scheduled during January 17-22, 2025. 

“India continues to hold its position as the world’s largest market for two-and three-wheelers, as well as tractors,” Vinay Raghunath, Partner and Automotive Sector Leader, EY-Parthenon, said. 

However, the industry is also facing challenges due to rising input costs, including raw materials, components, and logistics... Balbir Singh Dhillon, Head of Audi India, said the luxury car market is indicating surpassing the sales of 50,000 units. “...With a growing base of high-net-worth individuals and eco-conscious consumers, there is a strong demand for premium products that align with environmental values,” Dhillon said.