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Informist, Thursday, Feb. 6, 2025

 

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--FADA: Jan total vehicle retail sales 2.29 mln units, up 6.6% on year 
--FADA: Jan 2-wheeler retail sales 1.53 mln units, up 4.2% on year 
--FADA: Jan 3-wheeler retail sales 107,033 units, up 6.9% on year 
--FADA: Jan passenger vehicle retail sales 465,920 units, up 15.5% on year 
--FADA: Jan CV retail sales 99,425 units, up 8.2% on year 
--FADA: Jan tractors retail sales 93,381 units, up 5.2% on year 
--FADA: Auto retail sector cautiously optimistic about February 

 

MUMBAI – Total automobile retail sales rose nearly 7% on year to 2.29 million units in January as all segments reported growth, data released by the Federation of Automobile Dealers Associations showed. This was in line with the federation's earlier projection of flat-to-moderately positive growth, it said in a release.

 

All vehicle categories--two-wheelers, three-wheelers, passenger vehicles, tractors, and commercial vehicles--saw positive growth momentum, pointing towards sustained consumer confidence and a steady market recovery, the federation said. 

 

In January, two-wheeler retail sales saw healthy 4.2% on-year growth to 1.53 million units, with urban markets gaining share to nearly 44% from 41.6% a month ago. This growth was supported by new model launches, demand from the wedding season, and improved financing, the federation said, citing dealers. However, concerns about rising interest rates, rural liquidity challenges, and market uncertainty still linger, it added.

 

Three-wheeler retail sales in January were at 107,033 units, up almost 7% on year. Tractors retail sales in January were at 93,381 units, up 5.2% on year.

 

As for the passenger vehicles category, retail sales rose over 15% on year to 465,920 units last month. However, according to the federation, some of this uptick stems from December purchases registered in January for a '2025 model year' advantage.

 

It also said that many dealers noted improved demand, but pointed to last year's heavy discounting which helped clear older models and shift registrations. There was an improvement in passenger vehicle inventory levels, which dropped by around five days to 50–55 days, indicating a healthier supply-demand balance, though warranting further monitoring.

 

Commercial vehicle retail sales were up a little over 8% on year at 99,425 units in January. According to the federation, the share of commercial vehicle sales in urban markets rose over that in rural markets. Growth was also boosted by higher freight rates and buoyant passenger carrier demand.

 

However, many dealers noted some major hurdles in the commercial vehicle segment, such as low cash flows, strict financing policies, weak rural sentiment and sluggish activity in the cement, coal and infrastructure sectors. "Overall, the (commercial vehicle) sector shows cautious optimism but faces persistent headwinds," the federation said.

 

For Apr-Jan, the total vehicle retail sales were 22.08 million units, up 8.4% on year. Ongoing demand from weddings, festivals and fresh product introductions could sustain footfalls, the federation said. Due to a promising start to 2025, the auto retail sector enters February with cautious optimism, it added.

 

According to the federation's latest survey, nearly 46% of dealers expect growth in February, while 43% expect sales to stay flat and the rest 11% foresee a dip. Furthermore, improved inventory management, better financing options from select lenders, and backlogged orders in certain segments add to the sense of guarded confidence, the federation said. 

 

Many dealers believe that the post-budget lift in consumer sentiment could lead to a stable or slightly elevated sales curve, it said. On the other hand, shorter working days, pockets of weak rural liquidity, and inflationary pressures remain areas of concern, potentially limiting the extent of any upswing, the federation added. Factors such as strict lending criteria, costlier vehicles and subdued demand in certain industrial sectors could also weigh on the overall performance.  End

 

Reported by Akshita Kumar

Edited by Nishant Maher

 

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