The Indian market grew by 7.5% in H1-2024 and registered the highest ever half-yearly wholesales of 21,61,655 vehicles
- The average monthly volume in 2024 was 3,60,276
- 3,93,645 vehicle sales make January 2024 the best sales month in history
- Strong demand for SUV, crossover and MUV body-style products are the major growth driver in 2024.
The early 2024 growth rate was on the higher side due to the lower base effect of 2023, which can be regarded as the tail end of the supply-side shortage phase induced by the COVID-19 pandemic. However, the month-over-month growth rate has started tapering downward as India progressed through different phases of the general election starting in April 2024. Post-election results: growth remained muted in June 2024 at 3.6%.
The decline in demand in Q2 2024 was quite widespread across the passenger car industry, as the top three luxury car makers in India also reported a muted growth rate: Mercedes (0.5%), BMW (-0.3%), and Audi (-6.5%). Seasonality does not come into play here, as it is a comparison of the same month in a different year.
Decoding growth path
Growth in 2024, at its best, can be regarded as a steady state when seen over the long term, but it hasn’t returned to the pre-pandemic level.
2024: From seller’s market to buyer’s market Quote:
Defying several macro and automotive-world-specific headwinds like high vehicle and fuel price inflation, the Indian passenger car market was driven by buyers’ sentiment, which fueled pent-up demand during the post-pandemic period. And the ensuing supply-side constraint made India largely a seller’s market for nearly three years, with a long waiting list for several products.
The future demand and growth path for the remainder of 2024 will now depend on evolving consumer sentiments, which don’t seem to be very buoyant as of now. Brands need to be cautious with pricing and dealer stock levels for the sustainability of the overall business ecosystem, especially during the upcoming festive season. Higher marketing spend at this point may not improve demand and bring higher sales growth, but a price correction and product enhancement can arrest sales fall in an unseen future
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SUVs now command 52% of the Indian passenger vehicle market!
- SUV/Crossover body-styled products now command 52% of the Indian passenger vehicle market in H1 2024
- The hatchback segment is now reduced to mere 26% due to a shift in demand towards SUV-styled products
- The MUV segment reached 13% market share with 27% growth in H1 2024, with sedans losing ground further.
Body style market share
- SUV/Crossover body-styled products grew by 23% and now command a 52% share of the Indian market
- A shift in consumer preference led to a de-growth of hatchbacks by 17%, leading to a mere 26% market share in H1 2024
- Higher sales of Toyota Innova Hycross and Maruti Ertiga moved entire MUV segment share up by 2% in H1 2024
- CNG sub-4m sedan sales have contained a steep fall in the overall sedan segment in 2024
Large segments with a high growth rate:
Largest segment: ~4m Crossover (monocoque chassis)
- ~4m monocoque chassis-based Crossover is now the biggest segment in India. This segment further grew by 14% in 2024 to reach a volume level of 4,19,277 units.
- Maruti is a dominant player right now with three products: Brezza, Fronx, and Taisor (with a Toyota badge), and 41% of the of the segment share.
- Tata Nexon Facelift-2 is the second-best-selling product in the segment, followed by the Hyundai Venue facelift and the recently launched Kia Sonet Facelift.
-Mahindra is trying to make a comeback in this segment with the facelifted and rebranded XUV 300 (3XO), which now has segment-first ADAS-L2 and a dual glass-pane panoramic sunroof.
-Clearly, this segment has two price spectrums. The lower spectrum is composed of products like Maruti Fronx, Toyota Taisor, Nissan Magnite, and Renault Kiger, which do not offer sunroof as of now.
Second largest segment : ~4.3m Mid-size Crossover (monocoque chassis)
- ~4.3m monocoque chassis-based SUV is the second largest segment in India. This segment further grew by 17% in 2024 to reach a volume level of 2,71,052 units.
- Hyundai Creta dominates this segment ever since 2015.
-Maruti, along with Toyota’s volume, has reached closer to Creta’s segment share but has to offer huge discounts in 2024 to convert high wholesale into retail.
-Rest, everyone else is struggling under the heat of the mighty Creta ‘brand’ that it has become over a period of time, due to its all-rounded attributes!
Emerging segment – ~3.8m Small Crossover
- The entry of Tata Punch in 2021 has created this sub-segment of crossover under the sub-4m category. The addition of a CNG (mid-2023) and an electric (early 2024) drivetrain has made Punch the best-selling car of 2024.
- This nascent segment grew much faster in 2024 due to the entry of the Hyundai Exter.
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