Automobile Retail Sales Rose 9% in 2024 Backed by Strong Demand

Automobile retail sales in 2024 grew by 9% year-on-year, driven by strong demand for two-wheelers and passenger vehicles, despite a challenging business environment. Total vehicle registrations for the year reached 26,107,679 units, up from 23,928,293 units in 2023. This increase reflects a growth of 9%, as reported by the Federation of Automobile Dealers Associations (Fada).

Fada President CS Vigneshwar highlighted that the auto retail industry showed resilience in 2024, navigating through multiple challenges such as heatwaves, elections at both the central and state levels, and inconsistent monsoon patterns. Despite these obstacles, the sector managed to maintain strong demand and overall growth.

Growth in the Two-Wheeler Segment

The two-wheeler segment saw significant growth, driven by factors such as improved supply, the introduction of new models, and strong demand in rural areas. However, the segment continued to face challenges, including financial constraints and increased competition from electric vehicles (EVs), which impacted its overall performance.

The passenger vehicle (PV) segment benefitted from network expansion and new product launches. Despite this, the segment faced margin pressures due to high inventory levels, which led to a discounting battle in the second half of the year. PV sales increased by 5%, reaching 4,073,843 units in 2024, compared to 3,873,381 units in 2023.

Weak Performance in the Commercial Vehicle Segment

The commercial vehicle segment saw weaker performance in 2024, influenced by uncertainty surrounding the elections and a reduction in infrastructure spending. Sales in this segment remained flat at 1,004,856 units for the year.

Growth in Other Vehicle Segments

• Two-Wheelers: Sales grew by 11%, reaching 18,912,959 units in 2024, compared to 17,072,932 units in 2023.
• Three-Wheelers: Registrations also rose by 11%, totalling 1,221,909 units, up from 1,105,942 units in 2023.
• Tractors: Tractor sales grew by 3%, reaching 894,112 units in 2024.

Outlook For 2025 and Market Trends

Looking forward, Fada anticipates that rising rural incomes, the introduction of new models, and stabilization in the EV market could drive further growth in the two-wheeler segment, which has faced slower demand in recent years.

For the passenger vehicle market, dealers expect strong consumer interest driven by new SUV launches and feature-rich EVs, bolstered by a more mature market. However, concerns remain regarding price sensitivity and fluctuations in interest rates.

December 2024 Automobile Sales Performance

In December 2024, automobile retail sales experienced a 12% year-on-year decline, totalling 1,756,419 units. This was driven by a significant drop in two-wheeler sales, which fell by 18% to 1,197,742 units compared to 1,454,353 units in December 2023.

December Sales Breakdown

• Passenger Vehicles: Sales decreased by 2%, with 293,465 units sold, compared to 299,351 units in December 2023. This decline was mainly due to high inventory levels after the festive season and aggressive discounting strategies to clear stock.
• Factors Contributing to the Decline: Fada noted that poor market sentiment, a lack of new model launches, and intense price competition among co-dealers contributed to the reduced sales in December.

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