Auto sales rose 9% in 2024 on strong demand for two-wheelers: Fada

Two-wheeler growth was driven by better supply, new models, and strong rural demand, though finance constraints and rising EV competition posed challenges

Automobile retail sales grew by 9 per cent year-on-year in 2024, driven by strong demand for two-wheelers and passenger vehicles despite a challenging business environment, according to the Federation of Automobile Dealers Associations (Fada) on Tuesday.

 

Total vehicle registrations reached 26,107,679 units last year, up from 23,928,293 units in 2023, reflecting a 9 per cent increase, according to a report by news agency PTI.

 

Fada President CS Vigneshwar highlighted that the auto retail industry remained resilient despite multiple challenges in 2024, such as heatwaves, elections at both the central and state levels, and inconsistent monsoons.

 

The two-wheeler segment saw growth fuelled by improved supply, new model introductions, and strong rural demand, although challenges like finance constraints and rising competition from electric vehicles (EVs) persisted.

   

Passenger vehicle segment

 

The passenger vehicle (PV) segment benefitted from network expansion and new product launches, although it faced margin pressures due to higher inventory levels, which led to a discounting battle in the latter half of the year. Performance in the commercial vehicle segment was weaker, impacted by election-driven uncertainty and reduced infrastructure spending.

 

In 2024, PV sales rose by 5 per cent to 4,073,843 units, up from 3,873,381 units in 2023. Two-wheeler sales saw an 11 per cent increase, reaching 18,912,959 units, compared to 17,072,932 units the previous year. Three-wheeler registrations also grew by 11 per cent, reaching 1,221,909 units, up from 1,105,942 in 2023.

 

Tractor sales grew by 3 per cent, reaching 894,112 units, while commercial vehicle sales remained flat at 1,004,856 units in 2024.

 

Looking ahead, Fada suggested that rising rural incomes, the introduction of new models, and a stabilisation of the EV market could boost growth in the two-wheeler segment, which has faced sluggish demand in recent years.

 

For passenger vehicles, dealers expect strong consumer interest driven by new SUV launches and feature-rich EVs, aided by a more mature market. However, price sensitivity and fluctuations in interest rates remain concerns, the report said.

 

Automobile retail sales

 

In December 2024, automobile retail sales saw a 12 per cent decline year-on-year, totalling 1,756,419 units. Two-wheeler registrations dropped by 18 per cent to 1,197,742 units, compared to 1,454,353 units in December 2023.

 

Passenger vehicle sales fell by 2 per cent to 293,465 units from 299,351 units in the same month the previous year. This decline was largely due to high inventory levels after the festive season and aggressive discounting to clear stock, the report said.

 

Fada noted that poor market sentiment, fewer new model launches, and intense price competition among co-dealers contributed to the decrease in sales, the report said.

 

(With PTI inputs)