Auto Retail Declines 12% YoY In December 2024, Marking A Tough Year-end
Passenger Vehicle (PV) inventory levels remain high, impacting December sales
The year 2024 was marked by heatwaves, elections, and uneven monsoons for the automotive sector. Despite these headwinds, the sector posted a 9 per cent year-on-year (YoY) growth last year.
Segments like three-wheelers (3W), passenger vehicles (PV), and tractors reached new all-time highs, while two-wheelers (2W) came close to their CY’18 peak. The 2W segment grew by 10.78 per cent YoY, driven by improved supply, new model launches, and strong rural demand. However, challenges such as rising electric vehicle (EV) adoption and finance constraints weighed on its growth potential. The PV segment registered a 5 per cent YoY growth, supported by robust network expansion and product launches, though it faced margin pressures in the latter half of the year due to high inventory levels and discounting. Meanwhile, 3W sales grew by 10 per cent YoY, reflecting a strong demand recovery in both urban and cargo segments.
Commercial vehicles (CV) presented a mixed picture, with nearly flat growth of 0.07 per cent YoY. Uncertainty linked to elections, reduced infrastructure spending, and an overall subdued market sentiment contributed to this stagnation. Tractors, however, performed relatively well, with a 2.5 per cent YoY increase, thanks to strong rural demand and improved agricultural liquidity.
A Challenging December 2024
The December 2024 retail data painted a less optimistic picture, with a 12 per cent YoY decline in overall vehicle sales. All categories except tractors witnessed de-growth during the month. The 2W segment saw a significant drop of 17.6 per cent YoY, with dealers citing low cash flow, delayed crop payments, and weak consumer sentiment as primary factors. Finance availability for entry-level models also remained a challenge.
In the PV segment, retail sales fell by 1.9 per cent YoY as dealers struggled with high inventory levels following the festive season. Aggressive discounting, aimed at clearing stocks, further compressed margins. Additionally, limited new model launches and intensified competition among dealers dampened demand. Many customers postponed purchases to January 2025 in anticipation of new benefits and schemes.
CV sales declined by 5.2 per cent YoY, affected by delayed government fund disbursements and slow financing approvals. While tippers showed resilience, light commercial vehicles (LCVs) continued to witness a downward trend. Tractors were the standout performer, recording a 25.7 per cent YoY growth due to robust rural demand and improved market liquidity.
Regional Trends
Regional data revealed contrasting trends between urban and rural markets. Urban areas showed better resilience in PV and 3W sales, while rural markets drove growth in tractor sales. However, rural markets faced significant challenges in 2W financing and reduced disposable incomes, which affected overall sentiment.
Outlook for January 2025
FADA’s outlook for January 2025 is cautiously optimistic. Nearly half of surveyed dealers (48.09 per cent) expect growth, with only 10.69 per cent anticipating a decline. The 2W segment is likely to benefit from improved Minimum Support Prices (MSP) and increased rural fund inflows, though financing challenges and growing EV competition could pose risks. The PV segment is expected to see increased footfall due to wedding-season demand and year-start promotions, but price hikes might moderate these gains. The CV segment could experience mild recovery in Q4 FY’25, driven by infrastructure projects and better credit availability.
A Promising 2025 Ahead
Looking beyond the near term, FADA remains optimistic about CY’25. A majority of dealers (66.41 per cent) expect growth, driven by improved rural liquidity, evolving government policies, and an influx of new product launches across various powertrains. In the 2W category, fresh models and rising rural incomes are expected to spur demand, while the CV segment could see growth from infrastructure investments and stable credit availability. The PV segment is poised to benefit from new SUV launches and a maturing EV ecosystem, although price sensitivity and interest rate fluctuations remain critical watchpoints.
All India Vehicle Retail Data for YTD FY’25 (April’24 to Dec’24)
CATEGORY | YTD FY'25 | YTD FY'24 | Growth % |
2W | 1,44,67,968 | 1,30,81,797 | 10.60% |
3W | 9,20,408 | 8,66,441 | 6.23% |
CV | 7,30,151 | 7,35,545 | -0.73% |
PV | 30,02,311 | 28,88,868 | 3.93% |
TRAC | 6,50,136 | 6,48,538 | 0.25% |
Total | 1,97,70,974 | 1,82,21,189 | 8.51% |
Source: FADA Research
All India Vehicle Retail Data for CY'24
CATEGORY | CY'24 | CY'23 | YoY % |
2W | 1,89,12,959 | 1,70,72,932 | 10.78% |
3W | 12,21,909 | 11,05,942 | 10.49% |
E-RICKSHAW(P) | 4,81,786 | 4,74,226 | 1.59% |
E-RICKSHAW WITH CART (G) | 58,940 | 35,149 | 67.69% |
THREE-WHEELER (GOODS) | 1,24,972 | 1,14,732 | 8.93% |
THREE-WHEELER (PASSENGER) | 5,55,236 | 4,80,955 | 15.44% |
THREE-WHEELER (PERSONAL) | 975 | 880 | 10.80% |
PV | 40,73,843 | 38,73,381 | 5.18% |
TRAC | 8,94,112 | 8,71,918 | 2.55% |
CV | 10,04,856 | 10,04,120 | 0.07% |
LCV | 5,58,207 | 5,62,239 | -0.72% |
MCV | 75,560 | 70,734 | 6.82% |
HCV | 3,17,568 | 3,27,202 | -2.94% |
Others | 53,521 | 43,945 | 21.79% |
Total | 2,61,07,679 | 2,39,28,293 | 9.11% |
Source: FADA Research
All India Vehicle Retail Data for December'24
CATEGORY | Dec'24 | Nov'24 | Dec'23 | MoM% | YoY% |
2W | 11,97,742 | 26,15,953 | 14,54,353 | -54.21% | -17.64% |
3W | 93,892 | 1,08,337 | 98,384 | -13.33% | -4.57% |
E-RICKSHAW(P) | 40,845 | 40,391 | 45,100 | 1.12% | -9.43% |
E-RICKSHAW WITH CART (G) | 5,826 | 5,423 | 3,692 | 7.43% | 57.80% |
THREE-WHEELER (GOODS) | 9,122 | 10,940 | 9,546 | -16.62% | -4.44% |
THREE-WHEELER (PASSENGER) | 38,031 | 51,466 | 39,962 | -26.10% | -4.83% |
THREE-WHEELER (PERSONAL) | 68 | 117 | 84 | -41.88% | -19.05% |
PV | 2,93,465 | 3,21,943 | 2,99,351 | -8.85% | -1.97% |
TRAC | 99,292 | 80,519 | 78,944 | 23.31% | 25.78% |
CV | 72,028 | 81,967 | 76,010 | -12.13% | -5.24% |
LCV | 39,794 | 47,530 | 42,814 | -16.28% | -7.05% |
MCV | 4,662 | 5,473 | 4,987 | -14.82% | -6.52% |
HCV | 22,781 | 24,441 | 23,904 | -6.79% | -4.70% |
Others | 4,791 | 4,523 | 4,305 | 5.93% | 11.29% |
Total | 17,56,419 | 32,08,719 | 20,07,042 | -45.26% | -12.49% |
Source: FADA Research
All India Vehicle Retail Strength YoY and MOM comparison for Dec’24
Category | MoM% | YoY% | Category | MoM% | YoY% |
2W | CV | ||||
Urban | -46.90% | -13.37% | Urban | -10.06% | -2.63% |
Rural | -58.30% | -20.44% | Rural | -14.11% | -7.73% |
3W | TRAC | ||||
Urban | -15.79% | -5.23% | Urban | 31.45% | 41.69% |
Rural | -11.18% | -4.01% | Rural | 21.27% | 22.05% |
PV | Total | ||||
Urban | -7.03% | -3.81% | Urban | -37.22% | -9.45% |
Rural | -11.52% | 1.04% | Rural | -50.30% | -14.75% |
Source: FADA Research
All India Vehicle Retail Strength YoY comparison for YTD FY’25 (April’24 to Dec’24)
Category | YoY% | Category | YoY% |
2W | CV | ||
Urban | 8.94% | Urban | -1.57% |
Rural | 11.25% | Rural | -0.77% |
3W | TRAC | ||
Urban | 0.96% | Urban | -4.61% |
Rural | 11.45% | Rural | 1.42% |
PV | Total | ||
Urban | -1.14% | Urban | 5.61% |
Rural | 6.53% | Rural | 9.81% |
Source: FADA Research
Motor Vehicle Road Tax Collection (in Rs Crore) for Dec’24
| Dec'24 | Nov'24 | Dec'23 | MoM% | YoY% |
Motor Vehicle Road Tax Collection | 6,230 | 7,589 | 6,218 | -17.9% | 0.2% |
Motor Vehicle Road Tax Collection (in Rs Crore) for CY’24
| CY'24 | CY'23 | YoY% |
Motor Vehicle Road Tax Collection | 86,395 | 76,670 | 12.7% |
Source: FADA Research
