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Informist, Tuesday, Jan. 7, 2025

--FADA: Dec passenger vehicle retail sales 293,465 units, down 2% on year 
--FADA: Dec 2-wheeler retail sales 1.20 mln units, down 17.6% on year 
--FADA: Dec CV retail sales 72,028 units, down 5.2% on year 
--FADA: Dec 3-wheeler retail sales 93,892 units, down 4.6% on year 
--FADA: Dec tractors retail sales 99,292 units, up 25.8% on year 
--FADA: Dec total vehicle retail sales 1.76 mln units, down 12.5% on year 
--FADA: Passenger vehicle inventory levels between 55-60 days

MUMBAI – Dealers sold 1.76 million units in December, down 12.5% on year and 45.3% compared to the month before. The two-wheeler category saw the sharpest fall in the month, as 1.2 million units were sold, down 17.6% on year. The auto lobby body said dealers blamed this "substantial drop" in two-wheeler retail sales to low cash flow, poor market sentiment, delayed crop payments, and halted government disbursements. In addition, supply challenges and a growing push towards electric two-wheelers weighed on volumes.

Passenger vehicles' retail sales in December were 2% lower on-year at 293,465 units due to high inventory levels, which were impacted adversely by poor market sentiment, limited new model launches, and intense price competition among co-dealers. "While some dealers benefited from year-end schemes and expanded product ranges, overall demand remained subdued, with many customers deferring purchases to January for anticipated benefits," FADA President C.S. Vigneshwar said in a press release. Inventory levels of passenger vehicles in December ranged between 55 and 60 days, lower than the record high of 80 days seen some months prior.

Sales of three-wheelers fell to 93,892 units, down 4.6% on year in December. Passenger e-rickshaws, which form the bulk of this segment, contracted 9.4% on year as dealers sold 40,845 units. Passenger three-wheeler sales fell to 38,031 units in December, down 4.8% on year. 

Dealers sold 72,028 commercial vehicles in December, 5.2% lower on year. Sales of light commercial vehicles fell 7.1% on year, while medium, heavy models saw 6.5% and 4.7% lower sales, respectively. In addition to poor market sentiment, this segment was affected by delayed government fund releases and slow financing approvals. Unseasonal rains in some areas dampened demand as many customers postponed purchases, preferring 2025 models, the auto lobby body said. 

While all segments contracted in December, the tractor segment reported growth. Dealers sold 99,292 tractors in December, 25.8% higher on year and 23.3% higher on a monthly basis, reflecting strength in rural areas.

2024 SALES

In 2024, dealers sold 26.1 million units, 9.1% higher compared to 2023. Two-wheeler sales, which account for 72% of the overall sales, increased 10.8% on year to 18.9 million units. Dealers sold 1.2 million three-wheelers in 2024, 10.5% higher on year.

The growth rate for passenger vehicle retail sales continued to moderate as 4.1 million units were sold in 2024, 5.2% higher on year. In 2023 and 2022, sales of this segment grew 10.6% and 16.4%, respectively. 

Tractor sales in 2024 increased to 894,112 units, 2.6% higher on year. Sales of commercial vehicles remained flat at around a million units.

OUTLOOK
In the near term, a significant number of dealers expect to see growth in January. About 48% of the surveyed dealers expect to see growth in January, while about 41% anticipate stability, FADA said. Dealers feel two-wheeler demand could benefit from improved minimum support price and rural liquidity, but financing and the transition to electric variants remain key challenges. Commercial vehicles may see only a slight recovery, but passenger vehicles may get a boost from new launches, and demand due to the marriage season and promotions. However, price hikes could temper gains, FADA said.

In the long term, FADA expects the sales of two-wheelers to likely rebound on the back of rising rural incomes and fresh models. Around 66.41% of dealers expect to see growth in 2025, while 26.72% foresee stability, and only 6.9% see a downturn, FADA said.  End

Reported by Anand JC

Edited by Namrata Rao

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