FADA Releases FY’25 and March’25 Vehicle Retail Data

FY’25 Retails

• Overall Growth at 6.46%
  • Passenger Vehicles (PV) grew by 4.87%, closely matching FADA’s initial forecast of ~5%.
  • Two-Wheelers (2W) ended the year at +7.71%, falling short of the hoped-for double-digit increase.
  • Commercial Vehicles (CV) came in nearly flat at -0.17%, underscoring the impact of unpredictable weather, constrained financing, and shifting consumer sentiment.
• Rural vs. Urban Performance
  • 2W in rural markets grew by 8.39% vs. 6.77% in urban areas.
  • 3W in rural regions rose by 8.70%, significantly outpacing 0.28% growth in cities.
  • PV also performed better in rural belts with 7.93% growth, compared to 3.07% in urban markets.

March’25 Retails

• Overall Market
  • Retail sales declined -0.7% YoY but improved +12% MoM.
  • Early-month weakness (Kharmas period) was offset by a final-week surge (Navratri, Gudi Padwa, Eid, and year-end depreciation benefits).
• Segment Performance (YoY)
  • 2W: -1.7%, 3W: -5.6%, Tractor (Trac): -5.7%
  • PV: +6%, CV: +2.6%
• Dealer Concerns
  • High Targets: Many dealers raised alarms over OEM-set targets that lacked mutual agreement.
  • Inventory Pressures: PV stock levels rose to 50–55 days, raising carrying costs.
  • Financing & Cost Hurdles: Cautious lending, upcoming OBD2-related price hikes, and weak rural liquidity weighed on sentiments.

Near-Term Outlook is Cautious Optimism

• April Expectations
  • 46.23% of dealers anticipate flat sales, 38.70% expect growth, and 15.07% foresee de-growth.
  • Nearly 60% of surveyed dealers report weak booking pipelines, suggesting a fragile basis for any optimism.
• Key Influencers
  • IMD Heatwave Warning: Potentially lower footfalls and infrastructure delays if extreme temperatures persist.
  • Festivals & Marriage Season: Could offer a temporary boost.
  • Global Trade Tensions: Renewed tariff disputes add volatility to stock markets, potentially affecting disposable incomes and consumer sentiment.

Long-Term Outlook (FY’26) is Cautious Optimism

• Growth Projections
  • FADA anticipates mid to high single-digit growth in 2W, and low single-digit growth in PV and CV.
  • New model launches, EV expansions, and improved rural incomes are key supportive factors.
• Persistent Headwinds
  • Financing Constraints: Dealers emphasize the need for RBI rate cuts to reduce borrowing costs; stringent credit norms remain a major hurdle.
  • Global Tariff War: Potential stock market turbulence and weaker mutual-fund (SIP) returns could erode disposable incomes, slowing auto purchases.
  • Consumer Sentiment: Caution persists in PV due to limited product pipelines, while CV operators await more robust freight demand.

7^th April’25, Mumbai, INDIA: The Federation of Automobile Dealers Associations (FADA) today released Vehicle Retail Data for FY’25 and March’25.

FY’25 Retails

FADA President, Mr. C S Vigneshwar, shared his perspective on the Auto Retail performance for FY 2025:

“FY25 truly showcased how adaptable and resilient India’s auto retail sector can be. Our initial forecast of low single-digit growth—around 5%—for Passenger Vehicles ended up hitting the mark almost perfectly at 4.87%. While we hoped for double digits in Two-Wheelers, we ended up at 7.71%. Commercial Vehicles, on the other hand, came in nearly flat at -0.17%, reminding us just how much factors like unpredictable weather, financing constraints, and shifting consumer sentiment can shape overall demand.

A key highlight this year was the strong performance in rural areas. Two-Wheelers in rural markets grew by 8.39%, comfortably outpacing the urban growth of 6.77%, while Three-Wheelers saw an even bigger contrast at 8.70% in rural regions versus just 0.28% in urban. Even Passenger Vehicles posted 7.93% in rural sales, compared to 3.07% in cities.”

March’25 Retails

FADA President, Mr. C S Vigneshwar, shared his perspective on the Auto Retail performance for March 2025:

“The first three weeks of March were notably weak, largely due to the Kharmas period, but sales accelerated significantly in the last week, driven by positive triggers such as Navratri, Gudi Padwa, Eid, and year-end purchasing influenced by depreciation benefits. Overall, retail sales saw a YoY decline of -0.7% and a MoM increase of 12%. Among the segments, 2W, 3W, and Trac registered YoY drops of -1.7%, -5.6%, and -5.7% respectively, while PV and CV grew by 6% and 2.6% YoY. All segments were in positive territory on a MoM basis. Dealers across segments did, however, raise concerns about exceptionally high targets, which were often set without joint agreement. It is crucial for OEMs and Dealers to work hand in hand, setting mutually attainable targets that reflect on-ground realities. Impractically high objectives risk creating confusion and financial strain within the retail network, ultimately hindering efforts to achieve sustainable growth and customer satisfaction.

In the 2W segment, dealers reported 11% MoM growth but noted a -1.7% YoY dip. While festive demand (Navratri, Gudi Padwa, Eid) and attractive discounts spurred some MoM momentum, subdued market sentiment persisted, influenced by upcoming OBD2-related price hikes, weak rural liquidity, and cautious financing. Additionally, stiff targets, heightened competition (including EVs), and a generally slow economy contributed to the YoY contraction. Issues such as low footfalls, network over-expansion, and rising operating costs remained.

In PV, the segment benefited from discounting, forthcoming price hikes, and festive buying, contributing to a 15.5% MoM and 6% YoY increase. New model launches and better variant availability also aided growth. Nonetheless, many dealers highlighted unrealistic targets, liquidity challenges, and regional pockets of low demand, resulting in PV inventories rising to about 50–55 days. Incentives and festival-driven gains did push overall results higher, but dealers remain cautious about high stock levels and target pressures as the new financial year begins.

CV dealerships reported moderate 2.68% YoY growth, with a robust 14.5% MoM upswing. Gudi Padwa deliveries, supportive financing, and infrastructure activity elevated customer footfall. However, major hurdles included aggressive targets and uneven product availability. Despite these challenges, the month closed on a positive note, buoyed by festive demand and the school-bus season.”

Near-Term Outlook

As April dawns, auto dealers across India brace for an uncertain month shaped by both domestic and global factors. IMD’s warning of intense heatwaves looms over consumer footfall and infrastructure activity, while renewed tariff tensions on the international stage add market volatility and rattle buyer sentiment. Despite these headwinds, nearly half of surveyed dealers still expect April sales to be flat and over a third foresee some growth—driven partly by regional festivals and the marriage season. Yet, the picture is far from rosy: nearly 60% of dealers across all segments report weak booking pipelines, signalling a fragile foundation on which any optimism must rest.

Within this delicate balance, each vehicle category faces its own blend of hopes and hurdles. Two-wheeler dealers anticipate a lift from festive buy-ins and marriage-season demand, but they remain wary of rising OBD2B costs, weak rural liquidity, and mounting competition from electric vehicles. Meanwhile, passenger vehicle showrooms look to pipeline bookings and localized celebrations—such as Akshay Tritiya, Bengali New Year, Baisakhi, Vishu etc.—to sustain momentum, even as many wrestle with surplus inventory and tentative consumer confidence. Commercial vehicle retailers, bolstered by ongoing infrastructure projects and school-bus needs, hope to maintain the tempo of a strong March, but heatwave disruptions and global trade anxieties could quickly stall the momentum. By mid-month, it will become clearer whether this mix of cautious optimism and underlying fragility can carry the industry through—or if the intense pressures of summer and an unsteady global outlook will prompt another round of recalibration.

Long-Term Outlook

Dealers across India are cautiously optimistic looking ahead to FY26, with FADA projecting mid to high single-digit growth in the 2W segment and low single-digit growth for both PV and CV. Many dealers pin their hopes on a combination of upcoming model launches and renewed interest in electric vehicles. Yet, significant headwinds dampen overall optimism. Financing remains a persistent challenge—dealers note that credit norms have tightened in recent months, and the need for further rate cuts by the RBI to bring down borrowing costs. Meanwhile, extended price hikes from OBD-2B norms weigh on consumers’ budgets, potentially impacting vehicle sales.

Adding to the uncertainty is the looming spectre of a global tariff war, which could spark stock market turbulence and erode returns on mutual fund SIPs. If investors see their disposable incomes shrink in tandem with market volatility, discretionary spending—like auto purchases—may well suffer. Within the PV segment, new launches and strategic marketing can offer a lift, but widespread concerns remain about subdued consumer sentiment. In CVs, the picture is similarly nuanced, with dealers expecting only a modest pickup in segments like school buses and passenger carriers while freight demand remains patchy. Overall, despite the prospect of incremental growth, lingering caution colours the outlook for FY26 as the health of the auto sector will hinge on how effectively stakeholders manage financing challenges, adapt to a shifting global trade environment and better inventory management.

Key Findings from our Online Members Survey

• Liquidity

• • Neutral              51.71%
  • Good                  29.79%
  • Bad                     18.49%

• Sentiment
  • Neutral              50.34%
  • Bad                     30.14%
  • Good                  19.52%

• Expectation from April’25

• • Flat                      46.23%
  • Growth               38.70%
  • De-growth         15.07%

• Expectation from FY’26

• • Growth               58.90%
  • Flat                      33.56%
  • De-growth         07.53%