“The two-wheeler segment suffered a substantial drop of -17.6% YoY and -54.2% 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,” said FADA President C S Vigneshwar.
He added that 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 cited that PV sales declined 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… Inventory levels ranged between 55 and 60 days,” he said.
Auto dealer sentiment for January remains cautiously optimistic.
In the two-wheeler segment, improved MSP and rural fund inflows could bolster sales, although financing challenges persist, said FADA.
For passenger vehicles (PV), upcoming new launches, wedding-season demand, and year-start promotions should drive footfall, though potential price hikes could moderate gains.
For the full calendar year 2024, automobile retail sales grew by 9% year-on-year to 26,107,679 units last year, up from 23,928,293 units in 2023. The growth was led by strong demand for two-wheelers despite multiple headwinds like extreme weather, elections and uneven monsoons.
FADA stated that three-wheelers, PV and tractor segments reached new all-time highs.
The two-wheeler segment almost breached its CY 2018 peak and Commercial Vehicles has yet to surpass its CY 2018 level.
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