The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, APRIL 7, 2025
The Federation of Automobile Dealers Associations (FADA) has reported a 6.46% year-on-year growth in India’s auto retail sector for the financial year 2024-25 (FY’25), despite a marginal dip of 0.7% in March 2025 compared to the same month last year.
According to the latest vehicle retail data released by FADA, the passenger vehicle (PV) segment saw a steady rise, registering a 4.87% annual growth, with March alone witnessing a 6% uptick. Notably, PV demand surged in rural areas, recording 7.93% growth against 3.07% in urban regions—highlighting a shift in consumer activity towards Bharat’s hinterlands.
The two-wheeler (2W) segment, while growing 7.71% for the year, fell short of industry expectations for double-digit growth. March 2025 saw a 1.7% decline, reflecting tepid consumer sentiments amid price sensitivities.
Commercial vehicles (CVs) remained largely flat for the year, with a negligible contraction of 0.17%. However, the segment showed signs of revival with a 2.6% increase in March. Meanwhile, the three-wheeler (3W) category displayed a rural-urban divide—sales in rural markets jumped by 8.70%, in sharp contrast to just 0.28% in cities. Overall 3W sales, however, declined by 5.6% in March.
The report also flagged concerns from dealers over manufacturer-imposed sales targets that lacked mutual consensus, leading to elevated inventory levels. PV stock has ballooned to a worrying 50–55 days, intensifying carrying costs for dealerships.
FADA noted that cautious lending practices, upcoming price increases linked to OBD2 regulations, and liquidity constraints in rural areas continue to pose challenges. Nonetheless, it projects a cautiously optimistic outlook, with mid to high single-digit growth anticipated in the 2W segment, and low single-digit expansion in PV and CV categories.
FADA emphasized that the upcoming fiscal will likely benefit from a combination of new product launches, electric vehicle (EV) proliferation, and improving rural income dynamics, all of which are expected to act as catalysts for sustained growth in the auto retail sector.
