Car sales in India hit record high of 4.3M
What's the story
The Society of Indian Automobile Manufacturers (SIAM) has reported a record-breaking sale of 4.3 million cars in India, the world's third-largest car market. But despite the achievement, the growth rate marks a significant slowdown to its lowest in four years. In fiscal year 2025, carmakers' sales to dealers saw a modest increase of 2%, largely driven by consistent demand for larger sport utility vehicles (SUVs).
Sales trend
Growth rate slows down after 2 years of high demand
India's domestic car sales growth has moderated after two years of high demand. From 12% in FY2022 and 27% in FY2023, the growth rate has moderated to 8% in FY2024 and just 2% in FY2025. SIAM had earlier predicted an industry growth of 1-2% for the current fiscal year, a forecast that analysts have deemed conservative.
Market strategies
Car manufacturers offer higher discounts to boost demand
To boost demand, car manufacturers are offering higher discounts for longer. The strategy comes as the pent-up demand that had previously driven growth starts to fade. SIAM expects domestic demand to get a boost from successive rate cuts by India's central bank, as well as a cut in personal income tax announced earlier this year.