Car demand crawls in rich south, surges in north, west

A slowdown in the country's information technology industry and startup economy has hit car sales in four key south Indian states, which together account for about 20% of the country's passenger vehicle market.

- Ayaan Kartik

Four of the five south Indian states—Karnataka, Tamil Nadu, Andhra Pradesh and Telangana—reported a 2.5%, 1.5% and 10.9% (AP+Telangana) decline in passenger vehicle sales, respectively, in FY25. Kerala, which accounts for 5% of total car sales in India, saw marginal 2% growth in PV sales in FY25, against 6.3% growth in FY24.

Demand for passenger vehicles has declined year-on-year in the southern states for the past four quarters.

Data from the Society of Indian Automobile Manufacturers Association (Siam), compiled by Kotak Institutional Equities, said total sales in the five southern states, including Kerala, was at 1.08 million in FY25, down from 1.12 million in FY24.

The fall in demand for passenger vehicles has hit the growth of top carmakers in the country, including Maruti Suzuki Ltd, Tata Motors Ltd and Hyundai Motor India Ltd.