Indian Car Market Consolidation in FY24
The Indian car market witnessed significant consolidation in FY24, with the top six brands capturing a staggering 92.6% of domestic sales. In contrast, the bottom six brands managed to secure a mere 2.9% of the $4.2 million market.
This consolidation was primarily driven by Mahindra & Mahindra, Toyota, and Maruti Suzuki. Data from the Society of Indian Automobile Manufacturers reveals that in FY23, the top six brands held a 90.2% share, while the bottom six accounted for 3.76% of the $3.8 million market.
The impact of this consolidation is evident in the struggles of several car companies. As many as one-fourth of the companies, including Izusu, Nissan, PCA, and FCA, failed to achieve even a 1% market share. Additionally, nine companies fell short of the 5% market share mark, which industry analysts consider crucial for a viable business.
Several well-established global car makers experienced substantial sales drops in the domestic market, primarily due to a lack of new models. Honda, for instance, witnessed a sales decline of over 5% in FY24, resulting in a market share of just over 2%. The company is now pinning its hopes on the launch of its SUV, Elevate, in India last September.
Izusu, which entered the Indian market with much fanfare, sold only 515 vehicles in FY24, a significant drop of over 47% compared to the previous year. Analysts attribute this decline to the company's expensive positioning and delays in introducing new models. Nissan, which previously aimed for a 5% market share in 2020, experienced negative growth in FY24, with sales plummeting by 10% and its market share falling below 1%.
Volkswagen India has set a target of 15% sales growth in India for CY 2024. However, its domestic sales grew by only 4.5% in FY24. The company's group company, Skoda Auto India, has also revised its ambitions in the country, aiming for a 5% market share by 2030. Despite this, its global CEO, Klaus Zellmer, has emphasized India's crucial role in its international expansion. In FY24, Skoda Auto India's sales declined by around 15% in the Indian market, leading to a market share of 1.05%.
In response to the challenging domestic market, many companies are focusing on exports to compensate for low domestic sales. Volkswagen India, for example, sold more cars abroad than in India, with exports increasing by a substantial 62% to over 44,000 vehicles in FY24. Renault and Nissan are also pursuing similar strategies, although their exports have declined sharply this year.