‘Despite extreme weather, elections’: Auto retail grew 9.1% on-year in CY24, says FADA

Auto sales: Despite a weak December where overall retail declined, the year 2024 saw a substantial growth, said Federation of Automobile Dealers Associations (FADA). Auto retail grew 9.1 per cent on-year despite headwinds like extreme weather, elections and uneven monsoons, the federation stated. However, December was a dampener as overall retail declined by 12.4 per cent with almost all the segments showing degrowth.

According to FADA, in CY24, two-wheelers grew 10.7 per cent, three-wheelers 10.4 per cent, passenger vehicles 5.1 per cent and tractors grew 2.5 per cent. Commercial vehicles was the only segment that remained flat at .07 per cent. 

However, in December, two-wheelers declined 17.6 per cent, three-wheelers 4.5 per cent, passenger vehicles 1.9 per cent, and commercial vehicles 5.2 per cent. Only the tractor segment showed a growth of 25.7 per cent on-year jump.

 In December, two-wheeler retails were hit by low cash flow, poor sentiment, delayed harvest payments and heightened EV competition, while the passenger vehicle segment saw degrowth due to high post-festive inventory, aggressive discounting and limited new launches, with many buyers deferring purchases to January. Commercial vehicles also faced weak sentiment, delayed government funding and financing bottlenecks.

Most dealers, around 48.09 per cent, are expecting a growth in January, while 41.22 per cent expect flat sales. Only 10.69 per cent of dealers have predicted a slowdown. 

Two-wheeler demand could benefit from improved MSP and rural liquidity, said FADA, while passenger vehicles could get a boost from new launches, marriage-season demand and promotions but possible price hikes could temper gains.