December auto sales skid 12%: FADA

Auto retail sales decline in December due to economic slowdown, delayed payments, and supply challenges, with cautious optimism for January.

Automobile retail sales in December slid 12% year-on-year (y-o-y) and 45.26% month-on-month (m-o-m), according to retail data released by The Federation of Automobile Dealers Associations (FADA), indicating a demand crunch in a slowing economy.

All categories except tractors witnessed contraction with two-wheelers (2W), three-wheelers (3W), passenger vehicles (PV) and commercial vehicles (CV) falling by 17.6%, 4.5%, 2% and 5.2% y-o-y respectively. Tractors, on the other hand, registered a notably contrasting 25.7% y-o-y growth.

The 2W segment which suffered a substantial drop of 17.6% y-o-y and 54.2% m-o-m was impacted by delayed crop payments, halted government disbursements and typical year-end factors, FADA said citing dealers’ feedback.

Supply challenges for popular models and the growing push toward EVs further weighed on volumes, it said.

PV retail sales declined by 1.9% yoy and 8.8% m-o-m, primarily due to high inventory levels following the festive season and aggressive discounting aimed at clearing stock, said C. S. Vigneshwar, president, FADA.

“Poor market sentiment, limited new model launches and intense price competition among co-dealers further impacted sales,” he said adding inventory levels have now come down to 55 and 60 days.

CV retails declined by 5.2% yoy and 12.1% m-o-m due to low market sentiment, delayed government fund releases and slow financing approvals, the FADA President said adding many customers postponed purchases, preferring 2025 models.