The first month of CY25 saw the automotive segment as a whole grow 6.6 percent YoY, as per FADA’s prediction of “flat to moderately positive”. PVs saw the most growth last month, registering a 15.5 percent YoY growth, followed by commercial vehicles (8.2 percent), three-wheelers (6.8 percent), and then two-wheelers (4.1 percent). None of the segments saw a decline in January 2025.
January 2025 auto sales: Segment-wise result
Passenger vehicles saw the most growth, mostly aided by December 2024’s sales spilling into January 2025, mostly for the later model year advantage. While the urban markets contributed to the majority of sales, the share went up by 1 percent (60.8% to 61.8%), while the rural market saw a robust growth rate — 18.57 percent vs. 13.72 percent.
The two-wheeler industry’s strongest driver was the launch of multiple new products from big brands such as Hero MotoCorp, TVS, Bajaj and others. That said, the ongoing marriage season demand and enhanced financing options also helped drive sales. Rising interest rates and overall market uncertainty remain to be challenges for the two-wheeler industry.
Near-Term Outlook
Riding on the momentum of a promising start to 2025, the Auto Retail sector enters February with cautious optimism. According to our latest survey, nearly half of dealers (46%) anticipate growth in the coming month, while 43% expect sales to stay flat and 11% foresee a dip. This blend of sentiments underscores the industry’s complex landscape—where bright spots are tempered by ongoing challenges.
On the positive side, 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.
At the same time, shorter working days, pockets of weak rural liquidity and inflationary pressures remain areas of concern, potentially limiting the extent of any upswing. Strict lending criteria, costlier vehicles and subdued demand in certain industrial sectors could weigh on overall performance.
Even so, India’s Auto Retail stands poised for modest gains if these headwinds ease. With nearly half of surveyed dealers still expecting an uptick, a collective sense of optimism prevails, suggesting that the industry is ready to ride out near-term challenges and look forward to brighter days ahead.
