India’s retail automobile sales witnessed a robust 9.1% growth in 2024, reaching 2.61 crore units, overcoming hurdles such as extreme weather conditions, elections, and uneven monsoons, according to data released by the Federation of Automobile Dealers Association (FADA).
Segment-wise, two-wheeler sales registered a notable 10.7% increase, while three-wheelers grew by 10.4%, passenger vehicles by 5.1%, and tractors by 2.5%. However, the commercial vehicle segment remained nearly flat, with a marginal growth of 0.07%.
Three-wheelers, passenger vehicles, and tractors achieved record-high sales in 2024, while two-wheelers nearly matched their 2018 peak. Commercial vehicles, however, are yet to surpass their 2018 levels.
FADA highlighted several challenges faced by the industry, including financing constraints and competition from electric vehicles affecting internal combustion engine two-wheelers. Meanwhile, commercial vehicle sales were impacted by election-related uncertainty and reduced infrastructure spending. Passenger vehicle sales faced margin pressures due to higher inventory and increased discounts.
Despite the annual growth, December 2024 saw an overall 12.4% decline in retail automobile sales compared to the previous year. Two-wheelers recorded a significant 17.6% drop, three-wheelers declined by 4.5%, passenger vehicles by 1.9%, and commercial vehicles by 5.2%. The tractor segment, however, stood out with a 25.7% year-on-year growth in December.
Looking ahead, FADA said that nearly 48% of automobile dealers expect growth in January 2025, while 41.22% anticipate flat sales, and 10.69% foresee a slowdown. The two-wheeler segment could benefit from improved minimum support prices (MSP) and better rural liquidity, though challenges like financing and the shift to electric vehicles persist.
Passenger vehicles are expected to see a boost from new launches, marriage-season demand, and promotional activities, but potential price hikes could limit growth.
In the long term, optimism prevails for 2025, with 66% of dealers projecting growth, 26.72% expecting stability, and only 6.87% anticipating a downturn.
“FADA remains optimistic that market recovery, coupled with strategic OEM support and policy-level clarity, will enable the automotive retail industry to conclude 2025 on a strong note,” the industry body said.
(Inputs from ANI)