1% growth in FY25: Why is Indian car market struggling
The Indian passenger vehicle (PV) market has recorded its slowest growth since the pandemic, with a mere 1% YTD growth in FY25, as per data from the Society of Indian Automobile Manufacturers (SIAM). However, despite the overall slowdown, Mahindra & Mahindra and Toyota Kirloskar Motor have been able to considerably increase their market shares.
Mahindra and Toyota's market share surge
Mahindra & Mahindra's market share has jumped a whopping 210 basis points (bps) YTD, while Toyota gained 185 bps. This growth is especially remarkable considering the general sluggishness of the Indian PV market. Meanwhile, Maruti Suzuki, the reigning market leader, saw its share drop by 150 bps to 40.6%. Hyundai is also likely to see flat or declining sales this year.
Mahindra's sales milestone and Toyota's robust growth
Mahindra will cross the 5 lakh annual unit sales mark for the first time with an estimated YTD growth of 22-23%. The growth can be credited to the success of new SUV models including Scorpio N, XUV700, Thar Roxx, and 3XO. Toyota has also witnessed strong growth with its popular models Innova Hycross, Innova Crysta, Hyryder, and Fortuner. The company hopes to end the year with around 3 lakh units sold.
Toyota's dealership expansion and sales strategy
Toyota expanded its dealership network from 919 outlets in 2023 to 1,113 in 2024, mostly in non-metro areas. This strategy has also played a role in its volume growth. Notably, over half of Toyota's sales came from rebadged Suzuki models. Despite the overall market expansion, other major players such as Tata Motors are likely to report flat or slightly declining sales this year.
Utility vehicles drive growth amid market challenges
The Indian PV market's lackluster performance is largely due to weakened urban consumption and rising inflation, which have subdued demand after a strong start to the year. However, utility vehicles (UVs) remain a silver lining in the market, now making up 64.9% of total PV sales. This trend highlights the changing consumer preferences and resilience of certain segments within the broader automotive industry.
