Auto Sales Decline by 7% in February 2025 as Weak Consumer Demand Hits All Segments
Automobile retail sales in India fell by 7% in February 2025 due to sluggish consumer demand across multiple vehicle categories. According to the Federation of Automobile Dealers Associations (FADA), total car sales declined from 20,46,328 units in February 2024 to 18,99,196 units this year.
The dip in sales has raised concerns among dealers, as inventory management challenges and subdued consumer sentiment continue to impact the industry.
Passenger Vehicle Sales Fall by 10%
The February 2025 passenger vehicle (PV) sales fell by 10% to reach 3,03,398 units, representing a significant market reduction. Entities within the market have emphasized that entry-level vehicle demand has not improved. The President of FADA C.S. Vigneshwar attributes the decline in sales numbers to the malfunctioning market perception and the delayed customer decisions. The PV segment inventory levels show no change since they stay consistent between 50 and 52 days, but dealers continue to worry about their high stock amount.
Entry-level vehicle sales performed poorly because consumers had weak purchasing attitudes and money access problems. Dealers insist on OEMs creating forecasting systems that match manufacturing delivery to market consumption patterns to prevent stockpiling.
Two-Wheeler and Commercial Vehicle Sales Decline
The sales of two-wheelers declined by 6% year-over-year to reach 13,53,280 units when measured during February. According to dealers, various factors, such as retail inventory disparities, confused consumer opinions, and market price adjustments led to this market slowdown. The urban sales market dropped more substantially than rural areas, which continued to perform better due to marriage season shopping and agricultural market needs.
The February wholesale market revealed a decline of 8.6% in retail sales for commercial vehicles as dealerships reported 82,763 units. According to dealers, the combination of hesitant transportation sector demands with stricter financial terms and pricing aggressiveness caused the decline. Specifically, the tipper vehicle market grew because of rising government spending and infrastructure activity throughout the sector.
Tractor Sales Decline, Cautious Optimism for March
In February 2025, the rural economy suffered a severe decline in tractor sales that dropped by 14.5% down to 65,574 units. The sales reached 65,574 units in this period due to agricultural market weakness plus rising inflation factors. Shipments for March look promising to dealers because various Indian festivals including Holi and Gudi Padwa are likely to enhance vehicle sales.
FADA maintains a positive outlook that festival events and year-end value depreciation policies will motivate sales recovery. The industry faces ongoing economic challenges because stock markets fell for five straight months, and people cut down on discretionary spending, which creates forecasts of market difficulties for future industry development.
