Automobile retail sales rise 9% in 2024 despite multiple headwinds: FADA

New Delhi: Automobile retail sales grew 9 per cent year on year in 2024 riding on the back of robust demand for two-wheelers and passenger vehicles amid challenging business environment, dealers' body FADA said on Tuesday.

Overall vehicle registrations stood at 2,61,07,679 units last year as compared to 2,39,28,293 units in the 2023 calendar year, recording a growth of 9 per cent.

"Despite multiple headwinds in CY24, including heatwaves, elections at both central and state levels and uneven monsoon, the auto retail industry remained resilient," the Federation of Automobile Dealers Associations (FADA) President C S Vigneshwar said in a statement.

In the two-wheeler segment, improved supply, fresh models and strong rural demand propelled growth, though finance constraints and rising EV competition continued to pose challenges, he noted.

The passenger vehicle (PV) segment benefited from robust network expansion and product launches, albeit with margin pressures due to higher inventory, thus leading to a discount war towards the second half, Vigneshwar stated.

Commercial vehicle segment performance was subdued amid election-driven uncertainty and reduced infrastructure spending, he noted.

PV sales stood at 40,73,843 units last year, up 5 per cent compared to 38,73,381 units in 2023.

Two-wheeler sales rose 11 per cent year on year to 1,89,12,959 units in 2024 as against 1,70,72,932 units in 2023.

Three-wheeler registrations rose 11 per cent year on year to 12,21,909 units as against 11,05,942 units in 2023.

Tractor sales witnessed a 3 per cent year on year growth at 8,94,112 units while commercial vehicle sales remained flat at 10,04,856 units in 2024.

On business outlook, FADA noted that in the two-wheeler segment, rising rural incomes, fresh model introductions and an eventual plateau in EV disruption could revitalise growth after years of sluggish demand.

The CV sector is looking for the momentum from infrastructure investments, stable credit availability and government incentives -- factors that could spark a healthy uptick in fleet renewals and expansions, it said.

Meanwhile, PV dealers anticipate strong consumer pull from new SUV launches and feature-rich EVs amid maturing ecosystem, FADA noted.

However, price-sensitive buyers and interest rate fluctuations remain watch points, it added.

"Overall, FADA remains optimistic that market recovery, coupled with strategic OEM support and policy-level clarity, will enable the automotive retail industry to end CY25 on a robust note," it said.

In December 2024, automobile retail sales declined 12 per cent year on year to 17,56,419 units.

Two-wheeler registrations fell 18 per cent to 11,97,742 units as compared to 14,54,353 units in December 2023.

PV retail sales also dipped 2 per cent to 2,93,465 units last month as compared to 2,99,351 units in December 2023.

PV retails declined primarily due to high inventory levels following the festive season and aggressive discounting aimed at clearing stock, FADA noted.

Poor market sentiment, limited new model launches and intense price competition among co-dealers further impacted sales, it added.

Overall, despite certain headwinds, automotive dealers remain hopeful that steady product availability, strategic marketing and supportive government measures will sustain momentum in the near term, it added.