Why Are Car Sales Rising Despite Slump? Auto Numbers Decoded

The Indian Passenger Vehicle (PV) market witnessed a modest 2.6 percent growth in sales, reaching 4,34,000 units during FY 2024-25, compared to 42,29,566 units sold in the corresponding period last year. Industry players attribute the slowdown to weak urban demand, the lingering impact of a high base from the previous year, and lackluster sales of hatchbacks and sedans.

During March, PV wholesale figures stood at 385,000 units, marking a 3.88 percent increase from 370,586 units sold in the same month last year.

Maruti Suzuki Sales Flatten

For the FY25 fiscal, Maruti Suzuki India (MSI) saw its sales stabilize at 22,34,266 units compared to 21,35,323 units in FY24. India's largest passenger vehiclemaker surpassed the annual total sales milestone of 2 million units for the second consecutive financial year. Its total domestic sales stood at 17,60,767 units in FY25, compared to 17,59,881 units in the previous fiscal year.

Rural Markets Outperform Urban Regions

Partho Banerjee, Senior Executive Officer (Marketing and Sales) at Maruti Suzuki, stated that while urban markets remained largely flat during the year, the company’s rural markets performed better, with sales rising about 10 percent last fiscal.

When asked about the lower growth rates in the PV industry last fiscal, he noted, “We entered FY25 on a high base, and the growth recorded in FY24 was largely due to pent-up demand post-pandemic.”

Banerjee also highlighted that the five-year compound annual growth rate (CAGR) for PVs hovered around 4.6 percent, aligning with initial projections by the Society of Indian Automobile Manufacturers (SIAM). FY24 had been a stronger year for the industry, witnessing an 8.9 percent increase from 38,90,114 cars sold in FY23.

Hyundai, Tata Motors Sales Dip

Hyundai Motor India (HMIL), which regained the second position in volumes, reported a 2.6 percent decline in PV dispatches to 598,666 units. It recorded total sales of 7,62,052 units in FY24-25.
Similarly, Tata Motors saw a 3 percent dip in domestic PV sales, reaching 553,585 units.
Commenting on the market conditions, Shailesh Chandra, head of Tata Motors’ PV and EV divisions, described FY25 as “a challenging year marked by fluctuating demand.” He also pointed out that demand growth moving forward would be shaped by macroeconomic factors such as 
However, Chandra pointed out, “Industry momentum is expected to be driven by continued innovation in line with evolving customer preferences. SUVs, CNG, and EVs will remain key growth drivers, fueling the industry’s expansion.”

Mahindra & Toyota Buck the Trend

Two automakers stood out amid the industry’s slowdown—Mahindra & Mahindra (M&M) and Toyota Kirloskar Motor (TKM). TKM saw a 27.9 percent surge in domestic sales, reaching 337,148 units, while Toyota posted a 19.9 percent rise to 551,487 units.
“We also closed the year with the highest Vahan registrations with 20% growth (1 st Apr 2024 to 31 st March 2025) helping us to keep our dealer inventory levels within norms,” M&M said in a statement. 

Business Outlook for FY26

Looking ahead, Industry players such as Maruti Suzuki, etc. expect muted growth in FY26 as well. “SIAM forecasts just 1-2 percent growth for FY26. We can’t expect the 15-20 percent post-COVID surge to continue indefinitely,” Banerjee remarked, emphasizing the unavoidable impact of the base effect.