For the calendar year 2024, auto retail grew by 9.1 percent YoY, despite multiple headwinds like extreme weather, elections and uneven monsoons. 2W (+10.7 percent), 3W (+10.4 percent), PV (+5.1 percent) and Tractor (+2.5 percent) segments posted growth, while CV remained nearly flat at 0.07 percent.
3W, PV and Tractor segments reached new all-time highs; 2W almost breached its CY18 peak and CV has yet to surpass its CY18 level.
Challenges for ICE 2W included financial constraints and rising EV competition; CV struggled with election-driven uncertainty and low infra spend; PV growth led to margin pressures from higher inventory and discounts.
In December 2024, overall retail declined by -12.4 percent YoY, with 2W (-17.6 percent), 3W (-4.5 percent), PV (-1.9 percent) and CV (-5.2 percent) facing de-growth. Only tractor showed a 25.7 percent YoY jump. 2W retails were hit by low cash flow, poor sentiment, delayed harvest payments and heightened EV competition.
PV declined due to high post-festive inventory, aggressive discounting and limited new launches, with many buyers deferring purchases to January. CV faced weak sentiment, delayed government funding and financing bottlenecks; LCV suffered, though tippers held some ground.
Near-Term Outlook
Roughly 48.09 percent of dealers expect growth in January, 41.22 percent see flat sales, and 10.69 percent predict a slowdown. 2W demand could benefit from improved MSP and rural liquidity, though financing and EV transition remain key challenges. CV may see a slight recovery, contingent on infra projects and credit approvals. PV should get a boost from new launches, marriage-season demand and promotions—but possible price hikes could temper gains.
Long-Term Outlook
In CY’25, 66.41 percent of dealers expect growth, 26.72 percent foresee stability and only 6.87 percent project a downturn. 2W could rebound with rising rural incomes and fresh models, while the CV segment looks to infra investments and stable credit for fleet expansions. PV is poised for continued traction from new SUVs, EVs and feature-rich offerings, though price sensitivity and interest rates need monitoring.
C S Vigneshwar, president, FADA, shared his perspective on the auto retail performance for CY 2024:
“Despite multiple headwinds in CY24—including heatwaves, elections at both central and state levels and uneven monsoons—the auto retail industry remained resilient, closing the year with a nine percent YoY growth. While 2W, 3W, PV and Tractor segments grew by 10.78 percent, 10 percent, five percent and 2.5 percent YoY respectively, CV retails stayed nearly flat at 0.07 percent YoY. Notably, 3W, PV and Tractor segments touched new all-time highs and 2W barely missed surpassing its CY18 peak. CV is also yet to reach its CY18 peak, a year which saw the introduction of axle load norms.”
He added, “In 2W, improved supply, fresh models and strong rural demand propelled growth, though finance constraints and rising EV competition remain challenges. CV performance was subdued amid election-driven uncertainty and reduced infrastructure spending. Meanwhile, PV benefited from robust network expansion and product launches, albeit with margin pressures due to higher inventory thus leading to discount war towards the 2nd half.”
Vigneshwar, shared his perspective on the auto retail performance for December 2024:
“In our previous release, 60 percent of dealers expected December to either experience de-growth or remain flat. Reflecting this sentiment, December’s total retails dropped by -12 percent YoY. All categories except tractors witnessed de-growth, with 2W, 3W, PV and CV falling by -17.6 percent, -4.5 percent, -2 percent, and -5.2 percent YoY respectively. Tractors, on the other hand, registered a notably contrasting 25.7 percent YoY growth.”
He stated, “The 2W segment suffered a substantial drop of -17.6 percent YoY and -54.2 percent MoM. Dealers cited low cash flow and poor market sentiment—exacerbated by delayed crop payments, halted government disbursements and typical year-end factors—as the main reasons. 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.”
He also added, “PV retails declined by -1.9 percent YoY and -8.8 percent MoM, primarily due to high inventory levels following the festive season and aggressive discounting aimed at clearing stock. 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.”
Further, he said, “CV retails declined by -5.2 percent YoY and -12.1 percent MoM due to low market sentiment, delayed government fund releases and slow financing approvals. Many customers postponed purchases, preferring 2025 models. While some segments, such as tippers, demonstrated resilience, ongoing LCV degrowth and unseasonal rains further dampened demand. Although year-end schemes and inquiries offered limited relief, overall sales remained under pressure.”
Near-Term Outlook
Looking ahead, auto dealer sentiment for January remains cautiously optimistic, with nearly half (48.09 percent) of surveyed dealers anticipating growth, 41.22 percent expecting stable demand and only 10.69 percent foreseeing a decline.
In 2W, improved MSP and rural fund inflows could bolster sales, although financing challenges persist. The rise of EVs in this segment will also begin to impact entry-level 2W market share. The 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. For PV, upcoming new launches, wedding-season demand, and year-start promotions should drive footfall, though potential price hikes could moderate gains.
Overall, despite certain headwinds, auto dealers remain hopeful that steady product availability, strategic marketing and supportive government measures will sustain momentum in the near term. However, PV OEMs must carefully manage their supplies in line with market demand.
Long-Term Outlook
With 66.41 percent of auto dealers anticipating growth, 26.7 percent expecting stability and only 6.87 percent foreseeing a slowdown in CY’25, the automotive retail sector appears poised for a significant rebound. Dealers across categories sense a resurgence in market confidence, fuelled by improved rural liquidity, evolving government policies and a wave of new product launches across multiple powertrain. Despite financing headwinds and heightened competition, many retailers believe that focused marketing strategies, robust supply chains and better alignment with customer preferences will create a foundation for sustained expansion.
In the 2W segment, rising rural incomes, fresh model introductions and an eventual plateau in EV disruption could revitalize growth after years of sluggish demand. The CV sector, traditionally strong in Q4, is looking for momentum from infrastructure investments, stable credit availability and government incentives—factors that could spark a healthy uptick in fleet renewals and expansions.
Meanwhile, PV Dealers anticipate strong consumer pull from new SUV launches, feature-rich EVs and its maturing EV ecosystem, though price-sensitive buyers and interest rate fluctuations remain watchpoints.
Read More: SUV sales surge on festive demand, rural market powers 2W and PV sales: FADA