Outlook Business Desk
Retail Auto sales in February 2025 saw a 7% year-on-year (YoY) decline last month, with all segments experiencing negative growth, according to data from the Federation of Automobile Dealers Association (FADA).
Retail sales of Passenger vehicle saw one of the steepest 10.34% YoY sales plunges, as per FADA. The industry body noted that entry-level demand for cars remained particularly soft. Dealers also pointed to weak market sentiment, slow customer conversions, and tough sales targets. Segment leader Maruti Suzuki sold only 1,18,149 PV car units compared to 1,33,135 cars sold in the same period last year.
Two-wheeler retail sales declined 6.33% YoY, despite an 8.57% growth in FY25 YTD sales. Urban areas saw a sharper 7.38% drop, while rural markets fell 5.5%. As per FADA, dealers cited inventory issues, pricing adjustments, weak consumer sentiment, and limited finance options as key factors contributing to the decline.
Commercial vehicle sales saw a slight 0.5% YTD decline, with an 8.6% drop in YoY retail sales in February. The decline was driven by a weak transportation sector, stricter financing rules, and pricing challenges. Tata Motors held a 32.53% market share, down from 35.95% in February 2024.
Three-wheeler sales declined by about 1% in February 2025 compared to February 2024, with 94,181 units sold. Segment-wise, passenger e-rickshaw sales dropped by 11.46%, while e-rickshaw with cart (goods) sales increased by 44.1%. Three-wheeler goods sales declined by 1.82% YoY.
Commercial Vehicle (CV) sales declined 8.6% year-over-year (YoY) in February. As per the FADA report, dealers cited weak transportation sector sales, stricter financing norms, and pricing pressures as key factors. However, robust tipper bookings, fueled by government spending and steady supplies, provided some relief.
FADA President C.S. Vigneshwar said that February saw a widespread decline across all vehicle categories, aligning with earlier predictions of a "flat to negative" trend. He also raised concerns about dealers receiving excess inventory, stressing the need for demand-driven allocations.
The near-term outlook for auto retail in March 2025 remains cautiously optimistic, with 45% of dealers expecting growth, 40% predicting stable sales, and 14% anticipating a decline.