The slow growth in car sales has become a concern for automobile companies. Maruti Suzuki India (MSI), the country’s largest car manufacturer, hopes that the Union Budget, to be presented on February 1, 2025, will include measures to increase consumption and support the struggling automobile sector.
Sales Growth and Industry Expectations
Maruti Suzuki expects a 3.5% increase in retail sales in the fourth quarter of the financial year 2024-25, following a similar trend in the past three quarters.
After announcing the company’s third-quarter results, Rahul Bharti, Executive Director (Corporate Affairs) at MSI, shared his budget expectations. He said, “Most activities related to the automobile industry are already covered under GST. However, any steps to boost consumption will benefit everyone, including the auto sector.”
Bharti added, “What is good for India is good for Maruti, and vice-versa. If the economy does well and consumption rises, it will be good for us.”
Rural vs Urban Sales Growth
Bharti highlighted that retail sales grew by 3.5% from April to December in the current fiscal year. Maruti Suzuki sold approximately 5.73 lakh cars during the October-December quarter.
Interestingly, rural areas saw a 15% growth in sales during the third quarter, while urban sales increased by around 2.5%.
Wider Economic Concerns
Not just the automobile industry, but FMCG and consumer durables sectors are also struggling due to declining consumption. The drop in demand is directly affecting their sales.
During recent budget discussions, economists and stakeholders urged Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to implement strong measures to boost consumption and support the economy. The industry hopes these steps will lead to faster economic growth.
