India’s car market stares at stagnancy: It may need a policy kickstart
Subscribe to enjoy similar stories. India’s market for passenger vehicles has slowed to a crawl. As reported, a forecast made by Indian carmakers at an internal meeting of the Society of Indian Automobile Manufacturers (SIAM) last week points to stagnant sales in 2024-25 at a level of just above 4.2 million units, with barely 1-2% growth expected in 2025-26.
While the market did recover from the pandemic and today’s slowdown may yet turn out to be a blip, such weak offtake could also be a sign of premature saturation. In a country where only 34 cars are owned per 1,000 people, this would be a matter of alarm. The potential for growth, after all, ought to be immense.
What we are seeing, though, is a scale-back of ambitions. Maruti Suzuki, India’s top carmaker, for example, seems convinced of a steeper road ahead than anticipated. Last week, its parent Suzuki Motor Corp reduced its sales target in India, aiming to sell an annual 2.5 million cars by 2030-31, down from its goal of 3 million units declared in October 2023.
It now plans to launch just four electric vehicles (EVs) in the country during this period, two less than earlier planned. It is possible that our car market is caught in the cusp of an EV transition. Under 100,000 new electric cars rolled onto Indian streets in all of 2024.
While that’s a 20% increase over the previous year, it is just a sliver of overall car sales. No wonder India’s ministry of heavy industries has reportedly asked SIAM to suggest what the government can do to speed up EV adoption. Purchase incentives of the sort that helped electric two-wheelers zip ahead are likely to be proposed.
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