Federation of Automobile Dealers Associations (FADA) has released its vehicle retail data for April 2025, offering a detailed view of evolving consumer behaviour, fuel trends and dealer sentiment at the start of the new financial year. With an overall year-on-year (YoY) retail growth of 2.95%, the sector is treading carefully amid economic caution and stock overhangs, especially in passenger vehicles.
Two-Wheelers Steady
Two-wheeler (2W) retail volumes grew by 2.25% YoY and 11.84% month-on-month (MoM), buoyed by strong rural demand in the post-Rabi harvest season. Dealers across rural India noted an uptick in enquiries, aided by robust crop yields, improving water reserves and a favourable monsoon outlook. Urban centres also saw stable interest, largely driven by new model launches and ongoing wedding-related demand. Yet, high financing costs and OBD2B-linked price hikes remain headwinds for the segment, particularly among entry-level buyers.
Electric two-wheelers faced a dip in momentum, dropping from 8.65% in March to 5.44% in April in terms of market share. Petrol-powered models continue to dominate, accounting for over 94% of all two-wheeler sales.
Passenger Vehicles Cautiously Upbeat
The passenger vehicle (PV) segment edged up 1.55% YoY but declined marginally by 0.19% MoM. This modest increase is largely attributable to sustained SUV demand and deep discounting practices. Entry-level models continue to underperform, reflecting a muted sentiment among budget-conscious buyers. Dealer feedback indicates that elevated inventory levels, hovering around 50 days, are creating cost burdens and necessitating cautious production planning.
Fuel mix analysis shows that petrol/ethanol continues to dominate at 49.97% share, followed by CNG/LPG at 19.67%, and diesel at 18.47%. EVs held a modest 3.5% share, while hybrids accounted for 8.4%, reflecting growing consumer interest in alternative drivetrains.
OEM-wise, Maruti Suzuki led with 39.44% market share, followed by Mahindra & Mahindra at 13.83% and Tata Motors at 12.59%. Hyundai and Toyota rounded out the top five, albeit with minor YoY declines.
Three-Wheelers Lead Growth Chart
The three-wheeler (3W) category registered a robust 24.5% YoY rise. Rural markets led the charge with a 28.23% jump compared to 20.4% in urban centres. Interestingly, electric three-wheelers claimed 62.68% of the total 3W market, up from 52.49% a year ago, highlighting the accelerating transition towards electrified mobility in this segment. Bajaj Auto remained the top OEM, though its share dropped slightly to 32.71% from 37.36% last year.
Despite the overall uptick, MoM growth in the segment was nearly flat at 0.39%, with sub-categories such as goods and passenger three-wheelers posting declines. This reflects uneven demand patterns across applications.
Commercial Vehicles Slide
The commercial vehicle (CV) sector contracted by 1.05% YoY and 4.44% MoM. High base effects, subdued freight rates and holiday-related disruptions contributed to the dip. Advance purchases in March led to higher carryover stock, affecting April conversions. Particularly, small commercial vehicles (SCVs) continued to struggle due to price increases and lingering product gaps. Conversely, medium and heavy commercial vehicles fared better, buoyed by staff transport and school bus orders.
Diesel remains the dominant fuel, with an 84.73% share, though electric CVs rose to 0.99%, indicating early but notable traction. Tata Motors held the top spot with 33.57% market share, followed by Mahindra (23.24%) and Ashok Leyland (17.41%).
Tractor Segment Holds Ground Amid Seasonal Transition
Tractor retails saw a 7.5% YoY increase but dipped 17.7% MoM, aligning with the seasonal transition post-Rabi. Rural sales grew 5.96%, supported by stable commodity prices and healthy procurement levels. Mahindra retained leadership across its two brands, M&M and Swaraj, jointly contributing over 42% of total sales. The category continues to be overwhelmingly diesel-driven, with alternative fuels making negligible inroads.
Dealer Sentiment Balanced
FADA’s dealer sentiment survey shows an evenly split outlook where 52.34% rated liquidity as neutral, with 23.83% each feeling it was either good or poor. Expectations for May were mixed, with 37.5% anticipating growth and 14.06% fearing de-growth. Most respondents (48.44%) expect the market to remain flat.
Urban retail demand grew 4.16% YoY, outperforming rural growth at 2.03%. However, the latter drove MoM momentum with a 10.77% rise, particularly in two-wheelers and tractors. Urban PV sales dipped slightly YoY, hinting at growing price sensitivity even in cities.
The outlook for May 2025 presents a mixed picture. Strong Rabi outcomes and an above-normal monsoon forecast from IMD are positive signals. However, the mismatch between rising household expenses and income growth continues to weigh on rural spending power. The RBI’s liquidity infusion could ease loan rates, though financiers are reportedly tightening lending criteria at the customer level.
In two-wheelers, the wedding season should support rural demand, albeit within a credit-constrained environment. PV buyers may delay decisions in anticipation of new launches, while CVs could remain subdued due to tepid freight movement and competition from electric three-wheelers.
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