Auto Retail Records 9.1% YoY Growth in CY24 Amid Headwinds: FADA Growth was led by the two-wheeler (2W) segment up by 10.7 per cent, three-wheeler (3W) segment by 10.4 per cent, passenger vehicles (PV) increasing by 5.1 per cent, and tractors by 2.5 per cent
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The Indian automobile industry displayed remarkable resilience in CY24, registering a 9.1 per cent year-on-year (YoY) growth in retail sales, despite facing challenges like extreme weather, uneven monsoons, and elections. Growth was led by the two-wheeler (2W) segment up by 10.7 per cent, three-wheeler (3W) segment by 10.4 per cent, passenger vehicles (PV) increasing by 5.1 per cent, and tractors by 2.5 per cent, while commercial vehicles (CV) remained flat with a 0.07 per cent increase, as per a press release by the Federation of Automobile Dealers Associations (FADA).
Notably, 3W, PV, and tractor segments achieved all-time high sales figures, with 2W sales almost reaching their CY18 peak. However, CV sales continue to lag behind CY18 levels. Challenges for internal combustion engine (ICE) 2Ws included financing constraints and rising competition from electric vehicles (EVs). Meanwhile, CV sales were impacted by election-related uncertainties and limited infrastructure spending. In the PV segment, while growth remained steady, it came at the cost of higher inventory levels and aggressive discounting.
In December 2024, overall auto retail sales declined sharply by 12.4 per cent YoY. 2W sales dropped by 17.6 per cent. PV sales fell by 1.9 per cent, with post-festive inventory and deferred buyer decisions contributing to the decline while CV sales also dipped 5.2 per cent in the same time. However, the tractor segment emerged as a bright spot, growing by 25.7 per cent YoY, driven by improved rural sentiment and agricultural demand.
Looking ahead, 48 per cent of dealers anticipate growth in January, with PV sales expected to benefit from new launches and seasonal marriage demand. The 2W segment could see a lift from improved rural liquidity, though EV competition remains a key hurdle. CV recovery will hinge on infrastructure projects and credit approvals.
