Besides modest growth, the Indian automotive market presented a landscape of shifting tides and rising SUV dominance in FY24.

In the Financial Year 2024-25, the Indian auto market – presenting a picture of modest overall growth, masking in turn significant internal recalibrations – reached wholesale volumes of 4.32 million units, a 2.5 percent increase from FY2023-24's 4.22 million numbers.

This uplift has concealed a market in profound transition, with Utility Vehicles (SUVs and MUVs) robustly driving growth while traditional hatchback and sedan segments faced a continued and concerning decline. The year was also marked by inventory challenges as OEMs and dealers grappled to clear backlogs, suggesting wholesale figures don't always mirror the immediate retail pull.

The unstoppable ascent of SUVs and MUVs

The narrative of FY2024-25 is overwhelmingly dominated by the relentless consumer shift towards SUVs and MUVs. This is no fleeting trend but a fundamental reshaping of market dynamics.

• SUVs: The powerhouse of growth, adding a staggering 242,024 units, an impressive 11.6 percent year-over-year increase. This surge reflects the Indian buyer's preference for commanding road presence, higher ground clearance, perceived safety and versatility.
• MUVs: Also played a crucial role, contributing an additional 40,468 units, marking a respectable 6.3 percent growth, driven by their practicality and space.

The combined growth of SUVs and MUVs (282,492 units) starkly contrasted with the overall market's net increase of 104,245 units, vividly illustrating their role in compensating for declines elsewhere.

The unstoppable ascent of SUVs and MUVs

The narrative of FY2024-25 is overwhelmingly dominated by the relentless consumer shift towards SUVs and MUVs. This is no fleeting trend but a fundamental reshaping of market dynamics.

• SUVs: The powerhouse of growth, adding a staggering 242,024 units, an impressive 11.6 percent year-over-year increase. This surge reflects the Indian buyer's preference for commanding road presence, higher ground clearance, perceived safety and versatility.
• MUVs: Also played a crucial role, contributing an additional 40,468 units, marking a respectable 6.3 percent growth, driven by their practicality and space.

The combined growth of SUVs and MUVs (282,492 units) starkly contrasted with the overall market's net increase of 104,245 units, vividly illustrating their role in compensating for declines elsewhere.

Traditional segments face severe headwinds

Conversely, traditional segments experienced significant contractions:

• Hatchbacks: Once the market's backbone, sales plummeted by 138,595 units (-12.6 percent). Shifting aspirations, narrowing price gaps with compact SUVs and a preference for features over sheer affordability contributed to this.
• Sedans: Continued their downward trajectory, declining by 39,652 units (-10.4 percent). The classic three-box design is increasingly losing out to the allure of SUVs, despite new launches.

The 11.6 percent SUV growth versus the 12.6 percent hatchback decline paints a clear picture of this structural market shift.

OEM performance: A tale of diverging fortunes

The 2.5 percent market growth was not evenly distributed, with some OEMs capitalising on shifts while others struggled.

• Mahindra & Mahindra (M&M): The standout performer

Mahindra recorded phenomenal 19.9 percent growth (91,623 additional units) and was single-handedly responsible for 53 percent of the industry's total net incremental volume growth. The Scorpio range (164,842 units) spearheaded this success. The XUV300 (now 3XO) also saw a significant uptick (58,895 incremental units).

• Toyota Kirloskar Motor (TKM): Riding high on strategy

Toyota registered substantial 25.8 percent growth (63,379 additional units), making it the second-largest contributor to market growth. The Innova range (107,204 units) remained its flagship. The Rumion (+32,378 units) and Hyryder (+11,472 units) were standout performers, benefiting from the Maruti Suzuki alliance.

• MG Motor India: EV strides amidst portfolio shifts

MG grew 12.0 percent (6,648 additional units), largely driven by its Windsor EV (likely Comet and other EVs) with 19,424 units sold. However, the flagship Hector slumped 43.1 percent (-11,815 units), indicating a portfolio rebalancing.

• Maruti Suzuki India: Stagnation for the market leader

India's largest carmaker saw virtually flat sales, with an insignificant increase of 883 units. Only 5 of its 17 models showed positive growth, notably Ertiga (+41,215 units) and Fronx (+31,481 units). The WagonR (198,451 units) reclaimed the top-selling car spot but saw a slight volume decrease. Significant declines in key models like Baleno (-28,446 units) and Swift (-15,680 units) underscored their dependency on the shrinking small car segment.

• Hyundai Motor India: Creta shines amidst overall dip

Hyundai saw a 2.6 percent sales decrease (-16,055 units). The Creta, however, was a formidable force, selling 194,871 units (+32,098 units), making it the third highest-selling model overall. Beyond the Creta and the new Exter (+6,111 units), nearly all other models, including i20 Elite (-14,475 units) and Verna (-14,434 units), faced volume declines.

• Tata Motors: Facing new challenges

Tata registered a 3.0 percent decline (-17,388 units). The Nexon saw a 5.0 percent dip (-8,609 units) despite segment growth. Major declines were seen in Altroz (-34,975 units), Tiago (-16,244 units) and Tigor (-10,422 units). The Punch was the bright spot (196,572 units, +26,496 units) and the new Curvv started contributing (+34,019 units).

• Honda Cars India: Navigating a tough terrain

Honda led the decline among major OEMs with a sharp 23.9 percent drop (-20,659 units). The Amaze was its bestseller (32,703 units) but also declined. The City and the new Elevate SUV also saw significant drops (-6,024 and -11,321 units respectively), highlighting struggles due to a limited SUV portfolio.

• Volkswagen & Skoda: Discovering the worst kept secret (4-metre SUVs being the most consistent growth story)

VW sales dipped 2.2 percent (-967 units) with the Virtus sedan (+338 units, top mid-sized sedan) being the only grower. Skoda saw a marginal 0.8 percent rise (+342 units), largely due to the new Kylaq SUV's promising debut (+10,000 units in 3 months). However, Skoda's Kushaq SUV (-6,037 units) and Slavia sedan (-3,507 units) saw significant declines.

• Renault, Nissan, Jeep and Citroen

All faced significant double-digit percentage declines. Renault was down 16.6 percent (-7,539 units) with all models in red. Nissan, heavily reliant on the Magnite (-2,263 units), also saw a substantial percentage drop (-2,226 units overall). Jeep dropped 27.1 percent (-1,467 units), struggling with competitive pricing and segment gaps. Citroen's sales fell 22.6 percent (-1,902 units), with all products underperforming despite being in popular SUV segments.

Segment analysis: The rise, the fall and the battlegrounds

FY2024-25 saw clear distinctions in sub-segment performance, reinforcing the SUV dominance and the struggles of traditional car forms.

High-growth segments:

1. Mid-Sized SUVs (+19.2 percent): One of the hottest battlegrounds (+107,199 units). Key models include Maruti Vitara Brezza, Mahindra 3XO and Kia Sonet. Elevated driving position, perceived safety and road presence are key attractions.
2. 4-Metre SUVs (+11.3 percent): A fiercely contested arena with massive volumes (+98,304 units). Leaders included Maruti Fronx, Vitara Brezza, Mahindra 3XO and Kia Sonet.
3. Mid-Sized MUVs (+18.8 percent): Practicality and space continue to drive sales (+49,787 units). Toyota Rumion (+266.3 percent) and Maruti Ertiga (+27.5 percent) were key performers. The combined Ertiga/Rumion/XL6 platform sold nearly 250,000 units.
4. Mini SUVs (+10.1 percent): Tata’s stronghold dominated by Punch (+15.6 percent, +26,496 units) and Exter (+8.6 percent, +6,111 units).
5. Utility SUVs (+16.2 percent): Premiumisation and features drive this segment (+23,421 units). Mahindra Scorpio-N/Scorpio (+23,380 units)

Declining segments:

1. Midsize Sedans (-26.2 percent): Rapidly losing appeal (-25,562 units). Only VW Virtus showed minimal growth.
2. 4-Metre Hatchbacks (-21.0 percent): Faced a significant downturn (-81,313 units). Even leaders like Baleno (-14.5 percent) and Glanza (-6.5 percent) declined. Tata Altroz (-50 percent) and Hyundai i20 (-20.7 percent) suffered major losses.
3. Medium Hatchbacks (-9.0 percent): The Swift segment is under severe stress (-25,562 units)
4. Hatchbacks Mini (-7.0 percent): The traditional small car segment continues to shrink (-23,524 units). WagonR volumes dipped slightly
5. Utility MUV (-7.1 percent): Traditional workhorses like the Bolero and the Eeco were down (-17,558 units)

Strategic insights & the road ahead

The FY2024-25 performance offers critical strategic takeaways for the Indian automotive market:

• Unyielding SUV Dominance: The shift to SUVs is fundamental, not fleeting. Growth is evident across all SUV sub-segments (mini +10 percent, sub-4m +11 percent, mid-sized +19 percent, utility +16 percent). Manufacturers must continue to align product strategies accordingly.
• Resilience in the Premium Segment: Higher-priced models show stronger growth than budget segments, indicating economic resilience among premium buyers and a maturing market willing to pay for value. The Hyundai Creta's success at a significant price premium exemplifies this.
• Power of Platform Sharing: OEMs leveraging shared platforms (e.g. Maruti-Toyota, Hyundai-Kia) are achieving strong combined numbers and likely better profitability due to economies of scale.
• Polarisation of Manufacturer Performance: Growth is increasingly concentrated. In FY2024-25, Mahindra and Toyota were primary beneficiaries, while many others struggled. Mahindra alone contributing 53 percent of the market's net volume growth suggests a ‘winner-takes-most’ dynamic in key segments.
• Dawn of EV Mainstream Adoption: Traction for models like the MG Windsor EV (19,424 units) signals the beginning of EV mainstreaming. This trend is expected to accelerate with infrastructure development, battery cost reduction and more model choices.

Looking ahead

The Indian automotive market is set for continued evolution. While SUV dominance will likely persist, the pace of electrification, supply chain navigation and agility in responding to consumer and regulatory shifts will be crucial.

Traditional hatchback and sedan segments will continue to face challenges, demanding innovative OEM strategies – be it through feature enrichment, alternative fuels or strategic repositioning – to maintain relevance.

FY2024-25 was a year of clear winners and losers, highlighting the high stakes in this dynamic and rapidly transforming automotive landscape. The ability to anticipate and adapt to these multifaceted shifts will determine future success.

The author is an auto industry veteran and the CEO of Cargraphical Analytics Solutions.
 

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Designing a vehicle is not just about creating a car - it's a movement that defines the future of mobility.

Today's automotive design goes beyond aesthetics, focusing on creating comprehensive experiences that resonate culturally and socially. Designers are tasked with crafting vehicles that transcend mere functionality, meticulously considering every element, from form and ergonomics to interaction. The focus now relies on developing timeless products that shape not only the industry but also the culture of mobility itself. As the sector embraces a transformative future, the goal is to create vehicles that are connected, sustainable and deeply experiential, meeting the needs of an ever-evolving technological and societal landscape.

More than just aesthetics: The story behind design  

Design isn't limited to making vehicles visually appealing - it's a medium through which designers communicate values, history and innovation. Every vehicle tells a story, reflecting the legacy and ambitions of the automotive world. Designers today focus on sustainability, innovation and inclusivity, ensuring that the vehicles they create are forward-thinking while maintaining a connection to their origins. Whether it's the rugged strength of an SUV or the fluid, aerodynamic lines of a crossover, modern automotive designs are focused on progressiveness and strength while ensuring inclusivity. Moreover, designers aim to reflect the diverse needs of customers, creating designs that inspire trust and innovation while embodying the brand's values of accountability and forward-looking design.

Designing an immersive experience  

In today's automotive world, design is about creating immersive mobility experiences. Designers focus on crafting environments that feel intuitive, enhancing the connection between driver, passenger and vehicle. The interior space of a car is just as important as its exterior design, as it's where users spend most of their time. This requires careful attention to the shape, space and surface of every element, making sure that each aspect provides comfort while also evoking emotion. Designers are crafting multisensory experiences that go beyond simply driving. Every detail is designed with a purpose: from the tactile sensation of the steering wheel to the acoustic harmony of the cabin. The interaction between the vehicle and its occupants is at the forefront of modern design, creating spaces where the journey itself becomes an experience to be savoured, not just a functional necessity.

Looking ahead  

The future of automotive design is defined by adaptability and the integration of emerging technologies. Designers today must create vehicles that not only meet the demands of traditional internal combustion engines but also embrace the shift toward electric powertrains, autonomous driving and connected mobility systems.

The challenge lies in ensuring that vehicles are equipped to handle the fast growing technological and societal changes while remaining relevant and functional. Advancements in augmented reality (AR), virtual reality (VR) and digital modelling have revolutionised the design process. Several automotive players including us at Tata Motors are utilising these tools for real-time visualisation, enabling designers to rapidly prototype and iterate on concepts. The precision and efficiency offered by these technologies have streamlined the transition from initial sketches to full-scale production, ensuring that the final product is a true reflection of the designer's vision. To conclude  

Automotive design is no longer about fleeting trends or short-term solutions. It's about crafting vehicles that shape the future of mobility, ensuring that today's designs remain relevant in the evolving world of tomorrow. Designers are tasked with integrating technology. sustainability and user experience into every vehicle they create, ensuring that the mobility is not just functional but transformative. Through design, the automotive industry is crafting experiences that go beyond driving vehicles that connect with people and the world in meaningful, lasting ways.

Ajay Jain is the Head of India Studio and of the Global Design Strategy at Tata Motors. Working closely with the global design team, he reports to Martin Uhlarik, Vice President Global Design, Tata Motors. Contributing to the global design strategy at Tata Passenger Electric Mobility Ltd, Jain has 20 years of experience as an automotive designer.

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The European Union voted in favour of imposing extra tariffs on China-made EVs by up to 45 percent on 4 October 2024. Threatening a broader trade conflict with a country that has already vowed to protect its companies and is considered as the factory of the world, the move has been criticised by the auto industry and various EU member states.

With growing demand for EU and China resolving their differences through dialogue, the China Council for the Promotion of International Trade is known to express that it is opposed to be the move.

With the technical teams from China and the EU set to resume talks on 7 October 2024, the situation in EU as far as the auto OEMs like Volkswagen Group, Stellantis and BMW Group are concerned, there have been instances of profit warnings.  

Weak demand, rising costs, global competition, trade wars, geopolitical situations, subsidies and company-specific factors are among the reasons being underlined for the profit warnings by European automakers.

Receiving necessary support with 10 members backing the tariffs, 12 abstaining and five members – including Germany – voting against, the European Union, claim sources aware of the development, has been urged by the auto industry to negotiate with China for better terms and conditions rather than to reach the level were a trader war looks eminent.

Present in the China market for a decade or more, many European automakers seem to fear if the tariffs imposed on Chinese EVs will lead to negative consequences in that market for them.

Volkswagen is known to have said that the tariffs are ‘the wrong approach’. There is a need for the two sides to negotiate and find the middle way, mentioned an industry source in Germany in response to the tariffs by EU.

Image courtesy: EmDee (Wikipedia)

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The Association of Indian Forging Industry (AIFI), the apex body representing the forging industry in the country has announced its new officer bearers for 2024-26. 

The committee has elected Yash Munot as the new President of AIFI, while S.  Ravishankar was elected as the Vice-President.

Munot, who succeeds Vikas Bajaj, had previously served as Vice-President of AIFI from 2020 to 2024, is now also the youngest to be appointed as the President in the organisation's history. 

He currently serves as the CEO at Varsha Forgings and the Managing Director at KCTR Varsha Automotive. Munot begun his journey in the forging industry in 2005 joining his family business - Varsha Forgings. He was also instrumental in organising major industry events like IFC 2011, Forgetech  India 2016, Asia Forge 2019 and ForgeTech India 2023. He has served as the Western Region Chairman from 2018 to 2020. 

“The forging sector in India is at a pivotal juncture, with tremendous opportunities for innovation and growth. Our focus will be on fostering collaboration within the industry, driving technological advancements and promoting sustainable practices. I am committed to working closely with all stakeholders to ensure that our industry not only thrives domestically but also strengthens and enhances its global footprint. Together, we will build on the strong foundation laid by my predecessors and strive for excellence in every aspect of our work," said Munot.

S Ravishankar added, “I will strive for advancing our industry’s progress and tackling the challenges presented by a rapidly changing global landscape. Our priorities will include boosting competitiveness, driving innovation and equipping our members for future opportunities. I look forward to embracing the exciting prospects ahead and contributing to AIFI’s continued success during this transformative era”

He (Ravishankar) currently serves as the MD at Super Auto Forge and has over 25 years of experience in the auto component manufacturing industry. He is a Manufacturing Engineer with Bachelors degree from Annamalai University and Masters degree from The Ohio State University.

It was in 1997, after working in Detroit for two years, Ravishankar returned to India and joined his family business at Super Auto Forge. He has been instrumental in developing the international business of SAF and led the initiative to establish marketing offices in Detroit in 2001, followed by Belgium in 2011. He has been the Chairman of Indo American Chamber of Commerce for the period 2008 – 2009 – Tamil Nadu Branch and currently serves on the Southern Regional Committee of ACMA since 2021.

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