Subdued auto sales likely in April 2025 and year ahead: FADA survey

According to the Federation of Automobile Dealers Association (FADA), IMD's warning of intense heatwaves looms over consumer footfall and infrastructure activity, while renewed tariff tensions on the international stage add market volatility and rattle automobile buyer sentiment.

FADA said on Monday that nearly 60 percent of dealers across all segments report weak booking pipelines, signalling a fragile foundation for the new financial year 2025-26.

"The picture is far from rosy: nearly 60 per cent of dealers across all segments report weak booking pipelines, signalling a fragile foundation on which any optimism must rest," said a FADA statement.

Two-wheeler dealers, however, anticipate a lift from festive buy-ins and marriage season demand. Passenger vehicle showrooms look to pipeline bookings and localized celebrations, such as Akshay Tritiya, Bengali New Year, Baisakhi, and Vishu, among others.

FADA says dealers across India are cautiously optimistic for 2025-26, projecting mid to high single-digit growth in the two-wheeler segment and low single-digit growth for both passenger vehicle and commercial vehicle segments.

"Significant headwinds dampen overall optimism. Financing remains a persistent challenge--dealers note that credit norms have tightened in recent months, and the need for further rate cuts by the RBI to bring down borrowing costs," FADA said in its outlook.

FADA asserted that a possible shrink in disposable incomes in tandem with market volatility may well cause discretionary spending like auto purchases to suffer going forward.

FADA today also released retail sales data for the just-concluded financial year 2024-25.According to FADA data, passenger vehicles grew by 4.87 per cent, closely matching the Association's initial forecast of 5 per cent.

Two-wheelers segment ended the year at (+) 7.71 per cent, falling short of the hoped-for double-digit increase. Commercial vehicles came in nearly flat at (-) 0.17 per cent.

"A key highlight this year was the strong performance in rural areas. Two-wheelers in rural markets grew by 8.39 per cent, comfortably outpacing the urban growth of 6.77 per cent, while Three-Wheelers saw an even bigger contrast at 8.70 per cent in rural regions versus just 0.28 per cent in urban. Even Passenger Vehicles posted 7.93 per cent in rural sales, compared to 3.07 per cent in cities," said FADA President CS Vigneshwar.