Worst behind for PV industry, optimistic about 2025: Hyundai's Tarun Garg

After witnessing a moderation in the passenger vehicle industry volume growth rate in 2024, India’s second largest car maker Hyundai Motor India believes the most challenging period is over for the industry and anticipates sustained growth moving forward.

“I believe the worst is behind us…There are enough reasons to be positive. We have always seen that this kind of drop does not stay for too long. We have ended 2024 with close to 4% growth. I think we should look at similar numbers or more in 2025,” Hyundai Motor India Chief Operating Officer Tarun Garg told Autocar Professional.

The calendar year 2024 has been another record year for the passenger vehicle industry with 4.3 million units. However, the growth rate moderated to 4.7% from around 8% in 2023. Apart from the high base effect, several other factors such as high inventory, harsh summer, inflation, and state and parliament elections, dampened the momentum last year.

Garg noted that there are enough reasons to be optimistic about the growth going forward, given the positive signs seen in the industry on the back of good monsoon, robust rural demand, and potential cooling off of high inflation. 

Some automakers had adjusted their production and reduced their dispatches to dealerships in mid-2024 because of high vehicle inventory at the dealerships. In June-July, car dealers’ association FADA had raised alarms on a pile-up of unsold cars at dealerships and has called on automakers to rationalize production.

“October and December were two great months, which has really made sure that the inventories in the system are very low. Today, the industry is sitting on an inventory of only 2-3 weeks. From a time when industry inventory had reached 6 weeks, we are now at 2-3 weeks. These things are positive,” Garg said.

Meanwhile, 2025 is also set to witness a slew of electric vehicle launches from major carmakers and the adoption is expected to pick up considerably. 

Hyundai India and Maruti Suzuki are set to launch their first mass-market electric vehicle at the Bharat Mobility Expo this week while Tata Motors will rollout out new models. Mahindra & Mahindra’s new set of electric cars under the Born Electric portfolio will be on the roads in late February or early March. The product launches, especially on the electric vehicle side, are expected to generate more buzz in the passenger vehicle market. 

Hardeep Singh Brar, head of marketing and sales at Kia India, recently told Autocar Professional that they are estimating the passenger vehicle industry volumes to grow at around 5% growth in 2025. 

Read more: India’s car sales to sustain momentum in 2025