Weak April sales hit most top Indian carmakers as demand cools

(Reuters) -Three of India’s top four carmakers reported weak sales to dealers in April, company data showed on Thursday, as buyers delayed purchases amid concerns about slowing economic growth.

Market leader Maruti Suzuki posted a marginal 0.6% year-on-year rise, while Hyundai Motor (OTC:HYMTF) India and Tata Motors (NYSE:TTM) clocked declines of 11.6% and 5.1%, respectively.

Mahindra & Mahindra (NSE:MAHM), in contrast, reported a near 28% jump in monthly sales, aided by strong demand for its ’XUV 3X0’ and five-door ’Thar’ SUVs.

That helped the ’Scorpio’ maker overtake Hyundai and Tata Motors to the no. 2 spot in India’s car market for the second time this year.

The four automakers together account for 80% of a market that saw record sales of 4.3 million units last year. Their combined sales were up about 1.4% in April, led largely by Mahindra.

WHY IT MATTERS

India’s auto sector makes up 7% of GDP and is a major employer.

The country’s economic growth is seen slowing down, with the central bank projecting full-year GDP growth of 6.5% for fiscal 2025, lower than the 9.2% recorded the year before.

KEY CONTEXT

Car sales are cooling as the post-pandemic pent-up demand, which propelled sales to record highs in past years, has faded. Growth slowed to 2% in financial year 2025, from 8% the previous year and 27% in fiscal 2023, with industry experts attributing the moderation to a broader economic slowdown.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Manufacturers expect car sales to grow 1%-2% this year, although some analysts expect growth to pick up by June or September on lower interest rates and a cut in personal income tax.

Phillip Capital said that buyers were postponing purchases, with the trend likely to continue for up to four months.

Maruti has held up better due to SUV demand and fleet sales, while Hyundai and Tata have struggled amid fewer new launches as they derive two-thirds of their sales from SUVs.

BY THE NUMBERS

Manufacturer Domestic Sales Growth (%)

(units)

Maruti Suzuki 138,704 0.6

Hyundai Motor India 44,374 -11.6

Tata Motors 45,532 -5.1

Mahindra & Mahindra 52,330 27.6

Toyota (NYSE:TM) Kirloskar 24,833 32.8

Motor

Kia India 23,623 18.3

MG Motor India 5,829 23

Should you invest $2,000 in TTM right now?

With TTM making headlines, savvy investors are asking: Is it truly valued fairly? In a market full of overpriced darlings, identifying true value can be challenging. InvestingPro's advanced AI algorithms have analyzed TTM alongside thousands of other stocks to uncover hidden gems. These undervalued stocks, potentially including TTM, could offer substantial returns as the market corrects. In 2024 alone, our AI identified several undervalued stocks that later surged by 30 or more. Is TTM poised for similar growth? Don't miss the opportunity to find out.

Reveal Undervalued Stocks Now