Automobile Retail Sales in 2024 Grew By 9 Per cent Despite Challenges: FADA

Automobile retail sales in India grew by 9 per cent year-on-year in 2024, with total vehicle registrations reaching 26,107,679 units, compared to 23,928,293 units in 2023, according to data from the Federation of Automobile Dealers Associations (FADA). This growth was largely driven by strong performances in the two-wheeler and passenger vehicle segments, even as the sector faced a challenging business environment.

Passenger Vehicles (PV) 

Passenger vehicle sales increased by 5 per cent, with 4,073,843 units sold in 2024 compared to 3,873,381 in the previous year. Growth in this segment was supported by dealership network expansions and the launch of new models. However, high inventory levels pressured margins, prompting discounting strategies in the latter part of the year. 

Two-Wheelers 

The two-wheeler segment recorded an 11 per cent growth, with sales reaching 18,912,959 units, up from 17,072,932 in 2023. Factors contributing to this increase included improved rural demand, enhanced supply chains, and the introduction of new models, though challenges such as financing constraints and growing competition from electric vehicles (EVs) persisted. 

Three-Wheelers and Tractors 

Three-wheeler registrations also grew by 11 per cent, rising from 1,105,942 units in 2023 to 1,221,909 units in 2024. Tractor sales saw a modest 3 per cent increase, with 894,112 units sold compared to 868,086 the previous year, reflecting steady demand in the agricultural sector. 

Commercial Vehicles 

In contrast, the commercial vehicle segment remained stagnant, with sales at 1,004,856 units, mirroring the 2023 figures. This segment was adversely affected by uncertainties related to elections and a reduction in infrastructure spending. 

December Decline 

December 2024, however, saw a notable decline in retail sales, with a 12 per cent year-on-year drop to 1,756,419 units. Two-wheeler registrations fell by 18 per cent to 1,197,742 units, and passenger vehicle sales dipped by 2 per cent to 293,465 units. The decline was attributed to high inventory levels post-festive season, aggressive discounting, and subdued market sentiment. 

FADA identified several challenges in 2024, including heatwaves, elections at both state and central levels, and inconsistent monsoon patterns. Despite these, the automobile retail industry showed resilience. FADA President CS Vigneshwar remarked that the auto retail sector navigated a difficult year with resilience.