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Informist, Thursday, Mar. 6, 2025

--FADA: Feb total vehicle retail sales 1.90 mln units, down 7.2% on year 

--FADA: Feb passenger vehicle retail sales 303,398 units, down 10.3% on year 

--FADA: Feb 2-wheeler retail sales 1.35 mln units, down 6.3% on year 

--FADA: Feb CV retail sales 82,763 units, down 8.6% on year

--FADA: Feb 3-wheeler retail sales 94,181 units, down 1.9% on year 

--FADA: Feb tractors retail sales 65,574 units, down 14.5% on year

--FADA:Dealers cautiously optimistic for Mar retail sales, 45% predict growth 

MUMBAI – Overall automobile retail sales in India fell 7.2% on year to 1.90 million units in February, with all segments registering a decline on a year-on-year basis, according to data released by the Federation of Automobile Dealers Associations. The passenger vehicle and tractor segments fared the worst with retail sales falling 10% and 14.5%, respectively.

"February witnessed a broad-based downturn across all categories, a trend that was anticipated in our previous survey which projected a 'Flat to De-growth' sentiment for the month," FADA President C.S. Vigneshwar was quoted as saying in a press release. Dealers raised the issue of inventory being pushed towards them without their consent. While this could support the market objectives of original equipment manufacturers, aligning wholesale with genuine demand was crucial for healthy dealer viability, the federation said in the press release.

In February, two-wheeler retail sales fell 6.3% on year and 11.3% on month to 1.35 million units. On a year-on-year basis, urban areas saw a sharper decline of 7.4% compared to a 5.5% drop in rural markets. The performance in rural areas was better due to
better agricultural sentiment and wedding seasonal demand. For Apr-Feb, retail sales in the segment posted 8.6% on-year growth.

In the passenger vehicles category, retail sales fell 10.3% on year and 34.9% on month to 303,398 units. Dealers cited soft entry-level demand, delayed conversions, and challenging targets as factors that impacted sales. The overall passenger vehicle inventory level was 50-52 days, similar to levels in January. For Apr-Feb, retail sales in the segment posted rose 4.4% on year.

"...Dealers noted weak market sentiment which specially continues in the entry level category, delayed conversions, challenging targets and stressed that OEMs should avoid overburdening dealers with excessive inventory—a practice that risks unmanageable stock levels given the cyclical nature of the industry," Vigneshwar said, referring to the passenger vehicle segment.

In February, retail sales of commercial vehicles fell 8.6% on year and 16.8% sequentially to 82,763 units. All sub-categories, including light, medium and heavy commercial vehicles, saw a decline in sales on year and sequentially. Dealers cited weak sales in transportation sector, tighter finance norms and pricing pressures affecting bulk orders and institutional contracts as factors that impacted sales. For Apr-Feb, retail sales in this segment posted a 0.5% on-year fall.

Retail sales of three-wheelers fell 1.9% on year and 12% on month to 94,181 units in February. Sales of electric rickshaws, used for ferrying passengers, fell 11.5% on year and 16.7% sequentially to 32,361 units, while those of internal combustion engine variants rose 1.3% on year, but were down 11.5% on month at 44,522 units. In February, sales of tractors fell the most, by 14.5% on year and 29.8% sequentially to 65,574 units.

On the outlook for retail sales of vehicles in March, the association said it was cautiously optimistic, with 45% of the dealers expecting growth, 40% expecting a flat performance, and only 14% anticipating contraction. Five consecutive months of a decline in stock markets have dampened consumer confidence, with investors closing more systematic investment plans rather than opening new ones and reduced discretionary spending driven by dented profitability, FADA said.

The passenger vehicle space is expected to gain traction, fuelled by attractive schemes, the impact of preponed festival sales, and fiscal year-end advantages, FADA said. In the two-wheeler segment, higher agricultural output and festivals are seen as catalysts, though the booking pipeline slowed towards the end of February. The commercial vehicle space is likely to benefit from higher government spending and a spike in institutional buying, despite some liquidity challenges, FADA said.  End

Reported by Akshay V. Johnson

Edited by Avishek Dutta

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