Auto retail sales up 7% in Jan as passenger vehicle segment rises 16%

All segments begin year well, 46% of automobile dealers expect growth: Fada

Automobile retail sales in the country grew 6.6 per cent year-on-year (Y-o-Y) in January, marking a “moderately positive” note after business dipped the month before.

 

Passenger vehicles grew almost 16 per cent in January, according to data provided by the Federation of Automobile Dealers Associations (FADA). As many as 2.29 million automobiles were sold last month and 2.15 million in January 2024. It was a 30 per cent rise compared to sales in December 2024. All categories began the year well, with sales of two-wheeler, three-wheeler, tractor and commercial vehicles growing by 4 per cent, 6.8 per cent, 5 per cent and 8 per cent, respectively.

   

"The rise in sales during the month was partially due to the postponement of some sales in December, that resulted in a decline that month," said C S Vigneshwar, president of FADA.

 

Passenger vehicle sales grew 15.53 per cent Y-o-Y in January and 58.77 per cent compared to December (some December purchases were registered in January for a ‘2025 model year’ advantage). Market leader Maruti Suzuki India led growth, recording a 20 per cent rise in sales in January. Hyundai Motor India grew by 13 per cent, and Mahindra and Mahindra by 20 per cent, while Tata Motors saw a marginal ‘degrowth’ of 0.4 per cent.

 

"Urban markets inched up from 60.8 per cent to 61.8 per cent share, but rural actually posted a higher Y-o-Y growth of 18.57 per cent vs. urban’s 13.72 per cent. Many dealers noted improved demand but also pointed to last year’s heavy discounting, which helped clear older models and shift registrations. Inventory levels have improved, dropping by around five days to 50–55 days, suggesting improved supply-demand balance," said Vigneshwar.

 

Two-wheeler sales grew 4.15 per cent Y-o-Y in January and 27.39 per cent from December. Urban markets comprised 43.7 per cent of two-wheeler sales in January, gaining from 41.6 per cent in December. Urban sales outpaced rural Y-o-Y, growing by 4.54 per cent. Dealers said new model launches, wedding season demand and improved financing helped two-wheelers. However, concerns about interest rates, rural liquidity challenges and market uncertainty still linger, according to FADA.

 

Commercial vehicles' sale increased by 8.22 per cent Y-o-Y in January and surged 38.04 per cent from December, with urban markets improving from 50.1 per cent to 51.2 per cent share Y-o-Y and outpacing rural growth. "While higher freight rates and passenger carrier demand provided a boost, many dealers cited low cash flow, strict financing policies and sluggish industries (like cement and coal) as major hurdles. Sentiments in rural regions remained notably subdued, compounded by limited new products. Overall, the sector shows cautious optimism but faces persistent headwinds," said Vigneshwar.

 

According to FADA, 46 per cent of automobile dealers expect growth in the coming months, while 43 per cent expect sales to stay flat and 11 per cent foresee a dip.

 

"Dealers report that the continuing marriage season, fresh product launches and strategic promotional activities are likely to sustain customer footfalls. Furthermore, improved inventory management, better financing options from select lenders and backlogged orders in certain segments (such as commercial vehicles) add to the sense of guarded confidence. With supportive policies and a post-budget lift in consumer sentiment, many believe February could see a stable or slightly elevated sales curve," he said.