The sector faces a range of challenges and opportunities, including fluctuating demand, evolving consumer expectations, and a push towards greener, technologically agnostic vehicles. Puneet Gupta, Director of Mobility Forecast, India & ASEAN at S&P Global Mobility shared insights, examining the sector’s current status, challenges, and forward-looking strategies shaping the future of automotive in India.
Navigating market sentiments amid economic shifts
The Indian automotive market has been navigating short-term challenges with heavy discounting and high footfall in showrooms, yet struggles in converting foot traffic to retail sales. The industry has experienced a substantial increase in vehicle prices to the tune of 30-35 per cent over the past three years. It has impacted consumer purchasing power. As a result, many Original Equipment Manufacturers (OEMs) are recalibrating their pricing strategies, especially for SUVs, to address a highcost ownership environment and align with consumer expectations.
While demand has tapered in the short term, the market remains resilient, showing a 34 per cent growth compared to 2019, even as global markets remain flat or in decline. However, the growth outlook for 2024 is predicted to be more moderate, with the industry expecting a stronger recovery by 2026 as major automakers expand production capacities. Brands like Hyundai and Maruti Suzuki are investing heavily in new manufacturing plants, which are anticipated to drive future growth and meet the demands of an increasingly complex and diverse consumer base.
Shortened product life cycles and adaptive OEM strategies
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