India’s automobile retail sales saw a 9% year-on-year increase in 2024, driven by two-wheeler and passenger vehicle demand despite a challenging business environment, according to the Federation of Automobile Dealers Associations (FADA) on Tuesday. Total vehicle registrations reached 26,107,679 units, up from 23,928,293 units in 2023. Factors such as heatwaves, elections, and uneven monsoons posed challenges, while improved supply, new models, and rural demand fueled growth in certain segments. December 2024, however, saw a 12% year-on-year decline in retail sales.FADA President C S Vigneshwar acknowledged the challenging environment of 2024.”Despite multiple headwinds in CY24, including heatwaves, elections at both central and state levels and uneven monsoon, the auto retail industry remained resilient,” Vigneshwar said.
Two wheeler sales
Two-wheeler sales increased by 11% to 189,12,959 units in 2024, up from 170,72,932 units in the previous year. FADA attributed this growth to improved supply, new models, and strong rural demand. However, financial constraints and competition from electric vehicles remained challenges.
In the two-wheeler segment, rising rural incomes, fresh model introductions and an eventual plateau in EV disruption could revitalise growth after years of sluggish demand, FADA noted.
Passenger vehicle sales
Passenger vehicle (PV) sales grew by 5% to 40,73,843 units in 2024, compared to 38,73,381 units in 2023. Network expansion and new product launches aided this growth. However, margin pressures from high inventory levels led to a discount war in the latter half of the year.
“The passenger vehicle (PV) segment benefited from robust network expansion and product launches, albeit with margin pressures due to higher inventory, thus leading to a discount war towards the second half,” Vigneshwar stated.
PV dealers anticipate strong consumer pull from new SUV launches and feature-rich EVs amid maturing ecosystem, FADA noted. However, price-sensitive buyers and interest rate fluctuations remain watch points.
Commercial vehicle sales
Commercial vehicle sales remained flat at 10,04,856 units in 2024. Election-related uncertainty and reduced infrastructure spending contributed to subdued performance in this segment. The CV sector is looking for the momentum from infrastructure investments, stable credit availability and government incentives — factors that could spark a healthy uptick in fleet renewals and expansions, FADA said.
Three-wheeler registrations experienced an 11% increase, reaching 12,21,909 units in 2024, compared to 11,05,942 units in 2023. Tractor sales also saw a 3% rise, reaching 8,94,112 units.
December 2024 witnessed a 12% year-on-year drop in total vehicle retail sales, down to 17,56,419 units. Two-wheeler registrations decreased by 18% to 11,97,742 units compared to December 2023 figures of 14,54,353 units. Passenger vehicle retail sales also declined by 2% to 2,93,465 units in December 2024, compared to 2,99,351 units in December 2023.
Challenges
PV retails declined primarily due to high inventory levels following the festive season and aggressive discounting aimed at clearing stock, FADA noted.
High inventory levels after the festive season and aggressive discounting to clear stock were cited as reasons for the decline in PV sales. Poor market sentiment, limited new model launches, and intense price competition also affected sales. Despite the challenges, dealers remain hopeful for sustained momentum driven by steady product availability, strategic marketing, and government support.
Poor market sentiment, limited new model launches and intense price competition among co-dealers further impacted sales, FADA added. Overall, despite certain headwinds, automotive dealers remain hopeful that steady product availability, strategic marketing and supportive government measures will sustain momentum in the near term, it added.
“Overall, FADA remains optimistic that market recovery, coupled with strategic OEM support and policy-level clarity, will enable the automotive retail industry to end CY25 on a robust note,” FADA stated.
FADA expressed overall optimism for the automotive retail industry. The association believes market recovery, coupled with manufacturer support and clear government policies, will lead to a strong finish in 2025.
