New Delhi: Automobile retail sales surged by 9% year-on-year in the first quarter of FY25, reaching a total of 61,91,225 units compared to 56,59,060 units in the same period of FY24, according to the Federation of Automobile Dealers Associations (FADA). All segments except tractors experienced growth despite challenges such as high competition, excess supply, and significant discounting.
Passenger vehicle retails saw a 2.53% increase, with 9,20,047 units sold compared to 8,97,361 units a year ago. FADA President Manish Raj Singhania highlighted the hurdles faced by the segment, stating, “Despite strong bookings and customer flow, high competition, excess supply and discounting presented challenges for sustained growth in the PV segment.”
Dealers also faced notable difficulties stemming from elections, extreme heat, and market liquidity issues. Extreme heat conditions in May resulted in an 18% decrease in showroom walk-ins, with inventory levels surging to an all-time high of 62-67 days by the end of June.
“Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to the extreme heat and delayed monsoons, resulting in 15% fewer walk-ins,” Singhania added.
Two-wheeler retail sales increased by 12.56% to 45,54,255 units in April-June, up from 40,46,169 units in the previous year. The sector is showing promising recovery, especially in rural areas, although these are early trends. The segment also faced a 13% reduction in walk-ins due to extreme heat and the election period.
“The recovery in the two-wheeler segment is promising, largely due to the emerging performance in rural areas, although these are early trends,” Singhania noted.
Three-wheeler sales rose by 11.36% to 2,72,691 units compared to 2,44,878 units in the previous fiscal’s first quarter. Commercial vehicle retail sales experienced a marginal increase to 2,46,513 units, up from 2,44,834 units earlier.
“Commercial vehicle segment experienced a slowdown due to the elections and a pause in infrastructure projects. In April, elections dampened sentiment, causing delays in expansion plans. Additionally, limited financing options and regional challenges, such as water scarcity, further impacted performance,” Singhania stated.
However, tractor retail sales declined by 12.44%, falling to 1,97,719 units from 2,25,818 units the previous year.
FADA remains committed to advocating for prudent inventory control, improved financing options, and strategic planning to ensure the auto retail sector’s resilience and sustained growth. The organization represents over 15,000 automobile dealerships including more than 30,000 sales outlets across the country.
