India's Retail Automobile Sales Up 9.1% in 2024, Reaching 2.61 Crore Units

In 2024, retail automobile sales in India increased by 9.1 percent to 2.61 crore units, overcoming various challenges such as severe weather, elections, and inconsistent monsoons. Segment-wise, sales of two-wheelers increased by 10.7 percent, three-wheelers by 10.4 percent, passenger vehicles by 5.1 percent, and tractors by 2.5 percent, while commercial vehicles showed virtually no change at 0.07 percent, based on data published by the Federation of Automobile Dealers Association (FADA).

Three-wheelers, passenger cars, and tractor categories achieved record highs; two-wheelers nearly matched their 2018 peak, while commercial vehicles still have to exceed their 2018 figures. The industry body stated on Tuesday that internal combustion engine two-wheelers faced challenges such as financial constraints and increased competition from electric vehicles. Commercial vehicles faced challenges due to election-related uncertainty and reduced infrastructure spending; passenger vehicle growth encountered margin pressures from increased inventory and discounts.

In December, the final month of 2024, total retail automotive sales decreased by 12.4 percent, with two-wheelers (-17.6 percent), three-wheelers (-4.5 percent), PV (-1.9 percent), and CV (-5.2 percent) all experiencing a decline. Only tractors exhibited a 25.7 percent annual increase in sales in December. In the short term, FADA claims that around 48 percent of vehicle dealers anticipate growth in January, 41.22 percent expect sales to remain steady, and 10.69 percent foresee a decline.

Demand for two-wheelers may improve with enhanced MSP and better rural liquidity, yet challenges persist in financing and transitioning to electric vehicles.