In the wake of pandemic-induced production shortages and a surge in demand, car buyers have weathered long delays and rising prices. However, there’s a silver lining on the horizon as the automotive market gears up for a potential shift towards offering enticing discounts and promotions in the coming financial year.
Industry analysts are predicting a slowdown in the automotive sector for the 2024-25 period. Despite experiencing robust growth in recent years, experts anticipate a tapering off of demand and an accumulation of inventory at dealerships.
The current fiscal year is expected to close with a historic volume of 42.9 lakh units in the car market. While the industry has laid a strong foundation, it may take some time before witnessing accelerated growth once again. The surge in car bookings and purchases seen in recent years is likely to normalize as pent-up demand is gradually satisfied.
There could be several factors contributing to the subdued growth forecast for FY25. These include previous increases in car prices and the subsequent resolution of Covid-related production constraints. Bhatia also pointed out a growing preference for used cars, particularly in the entry-level segment, further impacting new car sales.
In the aftermath of the initial concerns surrounding demand during the onset of the Covid outbreak, there has been a remarkable rebound in sales. Global semiconductor shortages resulted in significant waiting periods across various brands, with pending deliveries reaching as high as 7 lakh units. However, as production capacity increased and semiconductor supply chains stabilized, much of the pent-up demand has been satisfied. In response, companies are rolling out special campaigns and discounts to stimulate sales.
Senior executives like Maruti Suzuki’s Shashank Srivastava and Honda Cars India’s Kunal Behl foresee either muted growth or minimal single-digit growth based on current market analysis. The industry is poised to face challenges ahead as it adapts to evolving market dynamics.
