Car wholesales subdued ahead of festive season on weak consumer sentiments

NEW DELHI: The sluggishness in the car industry was evident as wholesale deliveries in July — ahead of the festive season of Onam and Ganesh Chaturthi — were muted with top makers such as Tata Motors, Hyundai, Toyota and Honda reporting a decline in dispatches (year-on-year) with Maruti reporting flat numbers.Mahindra & Mahindra and Kia saw growth in numbers, but the overall mood of the industry remains subdued with industry officials speaking of challenges in generating demand as geopolitical tensions, fears from US tariffs and job cuts in the IT sector keep consumer sentiments low.Maruti, the country’s biggest carmaker, said while demand remains tough currently, the company expects revival during the festive period. “The overall industry is not growing… (and) it’s not a good sign,” Partho Banerjee, Senior Executive Officer (Marketing & Sales), said, adding that affordability — especially of entry-level cars — remains a challenge. During the festival, he said the company expects to see “green shoots” building up. Hyundai, which saw a 10% decline in domestic sales, said that there has been “some softness” in demand in recent months. “… we remain optimistic with the onset of the festive season and are fully geared up with robust supply and product offerings,” Tarun Garg, Director and COO said.Car companies are planning new launches to kick up demand and attract customers. Swedish luxury carmaker Volvo launched the next-gen version of its top-seller XC60 SUV priced at Rs 72 lakh (ex-showroom). Company MD Jyoti Malhotra said Volvo will consider bringing in plug-in hybrids to India if the tax structure gets conducive, and added that a FTA with EU — on the lines of India-UK trade deal — will help attract investments and new car models.Domestic car sales data for Jul’25

L = Lakh units; K = Thousand UnitsSource: Company DataThe industry believes that while demand has been difficult so far, the festive may see a turnaround. Companies are working on new model launches and discounts and incentives to push the numbers.However, this is putting a strain on their profitability. Many companies have also been going slow on production expansion plans in view of the uncertainty in the economy, something which has only gained in intensity following US President Donald Trump’s decision to slap a 25% tariff on India.