India’s retail automobile sales grew by 9.1% in 2024, reaching 2.61 crore units despite challenges like extreme weather conditions, elections, and uneven monsoons, according to data released by the Federation of Automobile Dealers Association (FADA).
Segment-Wise Performance:
- Two-Wheelers: Sales increased by 10.7%, nearing the 2018 peak despite challenges like financing constraints and growing competition from electric vehicles.
- Three-Wheelers: Posted a 10.4% growth, achieving an all-time high.
- Passenger Vehicles (PV): Grew by 5.1%, also reaching a record high, though growth was moderated by inventory pressures and discounts.
- Tractors: Saw a 2.5% increase, hitting a new high.
- Commercial Vehicles (CV): Remained almost flat with a marginal growth of 0.07%, constrained by election uncertainties and lower infrastructure spending.
Year-End Slowdown:
In December 2024, retail sales declined by 12.4% year-on-year:
- Two-wheelers dropped by 17.6%.
- Three-wheelers and passenger vehicles decreased by 4.5% and 1.9%, respectively.
- Commercial vehicles fell by 5.2%.
- Tractors, however, surged with a 25.7% increase, marking the only positive performance for the month.
Near-Term and Long-Term Outlook:
- January 2025:
- 48% of dealers expect growth.
- 41.22% predict stable sales.
- 10.69% foresee a slowdown.
- Improved MSP and rural liquidity could support two-wheeler demand, though financing and EV adoption remain hurdles.
- Passenger vehicles may benefit from new launches, marriage-season demand, and promotions, but price hikes could limit growth.
- Full-Year 2025:
- 66% of dealers project growth.
- 26.72% expect stability.
- Only 6.87% anticipate a decline.
- FADA remains optimistic about a strong recovery supported by strategic OEM initiatives and clear policy directions.
While segments like three-wheelers, passenger vehicles, and tractors reached record levels, the commercial vehicle segment continues to struggle to surpass its 2018 performance. The rising demand for electric vehicles and financing challenges are reshaping the two-wheeler market, while passenger vehicles are navigating higher margins and competitive discounts.
