New
Delhi: After being made to wait for car deliveries during the years of
production shortages and hyper growth in the Covid period, the customer
finally makes a comeback and returns as the king, with lucrative
discounts and attractive offers likely to come up in the new financial
year. And, the era of frequent price hikes comes to an end.
So,
2024-25 could be the year when the car industry, which has been moving
up strongly for past three years, witnesses muted growth as demand
shrinks and inventories build-up at dealerships, industry officials and
analysts told TOI.
According to experts, the car market, which is likely to close the current fiscal on record volumes of 42.9 lakh units, has developed a heavy base and may "see some time" before it starts to grow fast again. Also, pace at which consumers booked and bought cars during last three years may now see a slowdown as the pent-up demand has been fulfilled and a breather comes into play.
"There
are a variety of factors that will keep growth muted in FY25. Apart
from a heavier base, the reasons also include cars getting expensive
during the previous years and Covid production shortfall being met
subsequently," says Ravi Bhatia, president and director at research firm
JATO Dynamics. "Also, used cars will take up a share from new car
sales, especially in the entry category."
After the initial worries
around demand during the outbreak of Covid in March 2020, the pace of
turnaround in sales had taken almost everyone by surprise
The
phenomenon, which coincided with severe global shortages in supply of
semiconductors, saw huge waiting periods across brands, with pending
deliveries rising to as high as 7 lakh units at one point in time. With
companies gradually ramping up production and semiconductor availability
easing up, most of the pent-up demand has been fulfilled, leading to a
situation where companies are now pushing models through special
campaigns and discounts.
"Going by the current analysis, it looks
like growth would be muted, or at best be in low single digit," Shashank
Srivastava, senior executive officer (sales & marketing) at Maruti
Suzuki, says.
Kunal Behl, VP (marketing & sales) at Honda Cars India, also says that going may get tougher for the industry.
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