Auto industry is up, up and away, but cars and bikes see a dip

The figures for 2024 are in, and India’s automobile industry can go into its big jamboree later this week, the Bharat Mobility Expo and Auto Expo, with a smile on its face — sales are at their highest numbers ever. It is all the more commendable considering the litany of woes the auto sector went through, from components shortage to a stifling summer accentuated by a prolonged election campaign period, the majority of the populace seemingly hesitant to spend and an economy that has very much slowed down.

“2024 has been reasonably good for the auto industry. Positive consumer sentiments and the country’s macroeconomic stability, helped in propelling reasonable growth for the sector across vehicle segments,” said Shailesh Chandra, president of the Society of Indian Automobile Industry (SIAM), which released the annual sales figures on Tuesday.

With sales of 2.5 crore vehicles last year (four-fifths of it two-wheelers) and a comfortable enough growth rate of 11.6 per cent, India’s auto sector seems oblivious of the malfunction in the economy or even the EV juggernaut.

In fact, in the most aspirational category of sports utility vehicles (SUVs), the growth is as much as nearly 17 per cent, rising from 23.5 lakh utility vehicles to 27.5 lakh.

However, more than the rise, it is the fall that has more repercussions for the car companies. More interesting than the increase in sales of SUVs perhaps is the category at whose expense this growth has taken place — sedans. Conventionally, the poster boys of the auto sector, the regular sedan car as well as the small cars (hatchbacks) have been the biggest loser, as the customer trend across the board has been to opt for SUVs. This has seen the passenger car segment dropping from 16 lakh cars sold in 2023 to just 13.7 lakh last year, a drop of 14.4 per cent.

Another staple category too is facing the headwind of change — motorcycles. While it closed the year with a growth of 11.9 per cent growth, it is nowhere close to the nearly 20 per cent growth notched up by scooters during the same period. In fact, in the festive October-December quarter of last year which is traditionally the period with the maximum sales, motorcycle sales actually went down nearly 2 per cent, even as scooters went up from above 15 lakh to 17 lakh, a growth of 13.6 per cent.

“As the new year commences with a positive sentiment being created through the Bharat Mobility Global Expo, this momentum would further propel growth in 2025,” said Chandra.