Retail car sales cross 40 lakh mark for the first time

/ 2 min read

Passenger vehicle retails rose 5.18% year-on-year to 40.73 lakh units for the calendar year 2024.

This is the first time when passenger vehicle retail sales have crossed the 4 million mark.
This is the first time when passenger vehicle retail sales have crossed the 4 million mark. | Credits: Sanjay Rawat

Passenger vehicle retails in India grew 5.18% year-on-year to 40.73 lakh units for the calendar year 2024, according to the Federation of Automobile Dealers Associations of India (FADA). This is the first time when retail car sales have crossed the 4 million mark. In 2023, passenger vehicle retails stood at 38.73 lakh units.

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Two-wheeler retail sales jumped 10.78% year-on-year to 1.89 crore units on the back of improved supply, fresh models and strong rural demand, says the auto dealers' lobby. Two-wheeler volumes, however, remain lower than pre-pandemic highs of 2.1 crore units.

According to industry executives, passenger vehicle wholesales, shipments from the factory to dealerships, are expected to be around 4.3 million units in 2024.

Retail sales of automobiles grew despite multiple headwinds like extreme heatwaves, general elections and uneven monsoons. Three-wheelers, passenger vehicles and tractor segments reached new all-time highs.

“Despite multiple headwinds in CY24—including heatwaves, elections at both central and state levels and uneven monsoons—the auto retail industry remained resilient, closing the year with a 9% YoY growth,” says FADA president C S Vigneshwar.

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“While 2W, 3W, PV and Tractor segments grew by 10.78%, 10%, 5% and 2.5% YoY respectively, CV retails stayed nearly flat at 0.07% YoY,” says Vigneshwar.

Passenger vehicles benefited from robust network expansion and product launches, albeit with margin pressures due to higher inventory thus leading to discount war towards the second half, the FADA president says.

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Meanwhile, commercial vehicles retail sales are yet to reach their 2018 peak, a year which saw the introduction of axle-load norms.

In the month of December, all categories except tractors witnessed de-growth, with 2W, 3W, PV and CV falling by 17.6%, 4.5%, 2%, and 5.2% year-on-year respectively. Tractors, on the other hand, registered a 25.7% growth.

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The two-wheeler segment suffered a substantial drop of 17.6% in December. 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. “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,” says FADA.

PV sales were hit last month despite aggressive discounting, with many buyers deferring purchases to January. 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.

CV faced weak sentiment, delayed government funding and financing bottlenecks; LCV suffered, though tippers held some ground.

In its near-term outlook, FADA says improved MSP (minimum support price) and rural fund inflows could bolster two-wheeler sales. “The CV segment may see a mild uptick—Q4 is traditionally stronger—but progress will hinge on the pace of infrastructure projects and easier credit approvals. For PV, upcoming new launches, wedding-season demand, and year-start promotions should drive footfall, though potential price hikes could moderate gains,” it says.

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FADA says the auto sector is poised for significant rebound in 2025. “Dealers across categories sense a resurgence in market confidence, fuelled by improved rural liquidity, evolving government policies and a wave of new product launches across multiple powertrain,” it states.

In passenger vehicles, dealers anticipate strong consumer pull from new SUV launches, feature-rich cars and the growing EV ecosystem.

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