FADA Reports 6.6 Per Cent Growth in Vehicle Retail Sales for January 2025

The Federation of Automobile Dealers Associations (FADA) has released vehicle retail data for January 2025, reporting 6.6 per cent year-on-year (YoY) growth across all segments. Passenger vehicles (PV) led the recovery with a 15.53 per cent increase. In comparison, two-wheelers (4.15 per cent) and commercial vehicles (8.22 per cent) also grew but faced headwinds from rural demand constraints and financing concerns.

The PV segment surged 15.53 per cent YoY and recorded a 58.77 per cent month-on-month (MoM) rise, fueled by deferred December bookings as buyers opted for 2025 model registrations. Urban markets accounted for 61.8 per cent of total PV sales, up from 60.8 per cent in December, while rural sales grew at a faster 18.57 per cent versus 13.72 per cent in urban regions. Dealer inventory improved, ranging between 50–55 days, indicating a better supply-demand balance. However, discounts offered in the previous months to clear older stocks played a role in boosting overall sales.

Two-wheeler sales rose 4.15 per cent year over year, but rural demand remained weak at 3.85 per cent compared to 4.54 per cent in urban markets. New model launches, the ongoing wedding season, and improved financing helped support sales, yet high interest rates and liquidity challenges weighed on demand. Urban two-wheeler sales increased their share from 41.6 per cent in December to 43.7 per cent in January, reflecting stronger demand in cities. However, dealer sentiment remains cautious due to rural cash flow issues that could limit future growth.

The CV segment grew by 8.22 per cent year over year and saw a 38.04 per cent Month-over-Month jump, driven by higher freight rates and demand for passenger carriers. Urban CV sales rose 9.51 per cent, outpacing 6.89 per cent growth in rural markets. Despite this growth, dealers reported sluggish activity in key infrastructure sectors such as cement, coal, and construction, along with tighter financing policies affecting demand. Rural industrial activity remains a concern, and sustained momentum will depend on government infrastructure spending and financing accessibility.

The three-wheeler segment grew 6.8 per cent YoY, with strong demand for last-mile connectivity and passenger carriers. However, electric rickshaw sales dropped by 4.21, suggesting a slowdown in electric three-wheeler adoption despite ongoing government incentives. Tractor sales increased 5 per cent YoY, supported by seasonal agricultural demand and rural development programs. However, liquidity concerns and higher financing costs remain challenges for rural buyers.