The Federation of Automobile Dealers Associations (FADA) has released its vehicle data report for February, 2025. According to the report, vehicle retail sales reported a 7% Y-o-Y decline during the month, impacting all vehicle segments. Dealers expressed concerns about unsold inventory, while festive season optimism and segment-specific factors offer a mixed outlook for March. Inventory imbalances, weak consumer sentiment, and market fluctuations contributed to the decline.

FADA president, C S Vigneshwar said, “February witnessed a broad-based downturn across all categories, a trend that was anticipated in our previous survey which projected a ‘Flat to De-growth’ sentiment for the month. Dealers pointed to a challenging commercial environment, with weak sales in the transportation sector, tightening finance norms and pricing pressures delaying customer decisions—particularly in bulk orders and institutional contracts. There is cautious optimism that the market will improve in March as dealers recalibrate their targets to better align with current demand.”

Two-wheeler

Two-wheeler retail sales experienced a 6.33% Y-o-Y decline in February, despite an 8.57% growth in the fiscal year to date. According to the report, urban areas reported a 7.38% decline, while rural markets witnessed a 5.5% dip during the period under review.

Dealers pointed to inventory imbalances, pricing adjustments post-OBD-2B implementation, weak consumer sentiment, and limited financing options as key challenges.

Passenger vehicle

Passenger vehicle retail sales fell 10.34% Y-o-Y in February, contrasting with a 4% fiscal year-to-date growth. Demand for entry-level vehicles remained weak, with dealers reporting difficulties in converting leads and meeting targets. Inventory levels reached 50–52 days, highlighting the need for better alignment between wholesale targets and actual retail demand.

Commercial vehicles

Commercial vehicle retail sales saw an 8.6% Y-o-Y drop in February, adding to a -0.5% fiscal year-to-date decline. Dealers cited weak sales in the transportation sector, tighter financing norms, and pricing pressures affecting bulk orders and institutional contracts.

However, tipper bookings remained strong due to government spending and consistent supplies. Cautious optimism remains for March as dealers adjust their targets based on current demand.

March outlook

Dealer sentiment for March 2025 is mixed, with 45% expecting growth, 40% anticipating flat performance, and 14% predicting de-growth. Five consecutive months of declining stock markets have negatively impacted consumer confidence and discretionary spending.

Upcoming festivals like Holi, Gudi Padwa, and Navratri, combined with year-end depreciation benefits, are expected to boost retail sentiment across two-wheeler, passenger vehicle, and commercial vehicle segments.

Positive agricultural output and festive demand are expected to offset the recent decline in two-wheeler inquiries. Passenger vehicle sales are anticipated to benefit from promotional schemes, preponed festival sales, and year-end incentives. Increased government spending and institutional buying are likely to bolster commercial vehicle volumes, despite ongoing liquidity challenges.