Auto Dealer sentiment for January remains cautiously optimistic, with nearly half (48.09 per cent) of surveyed dealers anticipating growth, 41.22 per cent expecting stable demand and only 10.69 per cent foreseeing a decline, Federation of Automobile Dealers Associations (FADA) said on Tuesday.

In two-wheeler (2W), improved MSP and rural fund inflows could bolster sales, although financing challenges persist. The rise of electric vehicles (EVs) in this segment will also begin to impact entry-level 2W market share, C S Vigneshwar, President, FADA, said.

For the passenger vehicle (PV) segment, upcoming new launches, wedding-season demand, and year-start promotions should drive footfall, though potential price hikes could moderate gains, he said while sharing the monthly retail sales data.

The commercial vehicle (CV) segment may see a mild uptick—Q4 is traditionally stronger—but progress will hinge on the pace of infrastructure projects and easier credit approvals, FADA said.

In terms of monthly sales, the PV retail sales declined almost 9 per cent year-on-year (y-o-y) in December 2024 to 2,93,465 units as compared with 2,99,351 units in December 2023.

“Poor market sentiment, limited new model launches and intense price competition among co-dealers further impacted sales. While some dealers benefited from year-end schemes and expanded product ranges, overall demand remained subdued, with many customers deferring purchases to January for anticipated benefits. Inventory levels ranged between 55 and 60 days,” Vigneshwar said.

The 2W retail sales declined more than 54 per cent y-o-y to 11,97,742 units during the month as against 14,54,353 units in December of previous year.

“Supply challenges for popular models and the growing push toward EVs further weighed on volumes. Many dealers also mentioned that heightened discounts and limited financing options failed to offset weak demand,” Vigneshwar said.

Because of decline in both these segments, the total retail sales of vehicles declined 45.26 per cent y-o-y to 17,56,419 units in December 2024 as compared with 20,07,042 units in December 2023.

However, in terms of calendar year (CY) sales, both PV and 2W performed much better with PV sales growing more than 5 per cent and 2W sales almost 11 per cent y-o-y.

The PV sales grew at 40,73,843 units in 2024 as compared with 38,73,381 units in CY2023. In terms of market share, the share of three top players including Maruti Suzuki India, Hyundai Motor India and Tata Motors’ declined marginally to 40.26 per cent, 13.75 per cent and 13.21 per cent respectively in CY2024 as compared with 40.85 per cent, 14.23 per cent and 13.5 per cent respectively in CY2023.

However, market share of Mahindra & Mahindra and Toyota Kirloskar Motor grew at 12.03 per cent (from 10.44 per cent in CY23) and 6.35 per cent (from 4.99 per cent in CY23) respectively.

In the 2W retail sales, the total sales grew at 1,89,12,959 units during the year as compared with 1,70,72,932 units in the corresponding year. In terms of market share market leader Hero MotoCorp’s share dropped to 29.02 per cent CY24 from 31.33 per cent in CY23 and Bajaj Auto’s also dropped marginally to 11.55 per cent in last calendar year from 11.84 per cent in previous year.

However, market share of second largest 2W manufacturer, Honda Motorcycle & Scooter India grew at 25.37 per cent in CY24 as compared to 23.25 per cent in CY23, the FADA data indicated. Also, TVS Motor’s market share grew at 17.13 per cent versus 16.81 per cent in CY23.

Three-wheeler sales also grew 10.49 per cent to 12,21,909 units in the last calendar year as against 11,05,942 units in CY2023.

The CV retail sales grew marginally to 10,04,856 units in CY2024 as against 10,04,120 units in CY2023

Similarly, tractor sales grew 2.55 per cent to 8,94,112 units during the year as compared with 8,71,918 units the previous calendar year.

Overall, the retail sales of all categories put together, grew 9.11 per cent to 2,61,07,679 units during CY2024 as compared with 2,39,28,293 units in CY2023, the FADA report indicated.

Published on January 7, 2025