India’s Auto Retail Sales Up 2.95% in April 2025 Amid Festive, Rural Demand: FADA

India's automobile retail market posted a modest 2.95% year-on-year growth in April 2025, with total vehicle sales touching 22.87 lakh units, according to the latest data shared by the Federation of Automobile Dealers Associations (FADA). The uptick was broad-based across most categories, barring commercial vehicles, which registered a marginal decline.

The auto retail body stated that the boost in April sales was largely attributed to seasonal buying during festivals like Akshay Tritiya, Chaitra Navratri , and regional new years such as Baisakhi and Vishu. Rural demand also played a key role, especially following a healthy Rabi harvest, FADA noted.

Also Read: Passenger Vehicle Sales Decline 0.19% MoM, Buyers Await New Launches - FADA | Republic World

Segment-Wise Snapshot

The two-wheeler segment continued to dominate the retail landscape, with sales rising to 16,86,774 units—an increase of 2.25% from April 2024. Improved rural sentiment, driven by favorable crop yields, strong reservoir levels, and expectations of a good monsoon, helped fuel this growth. Enquiries in Tier-II and Tier-III towns picked up pace, buoyed further by the ongoing wedding season.

Passenger Vehicle (PV) sales stood at 3,49,939 units, reflecting a year-on-year (YoY) growth of 1.55%. However, FADA flagged concerns over high inventory levels, with stock at dealerships averaging around 50 days.

“Discount-led buying and strong SUV demand helped sustain sales, but conversion rates were moderated by high financing costs and cautious buyer behavior,” said FADA President C. S. Vigneshwar.

The three-wheeler segment emerged as a strong performer, clocking a 24.5% surge in sales to 99,766 units. This growth was largely fueled by demand for urban mobility and the expanding penetration of electric three-wheelers (E3Ws).

In contrast, Commercial Vehicle (CV) sales dipped by 1.05% to 90,558 units. FADA attributed the slowdown to a high base effect, tepid demand from e-commerce logistics, and growing competition from electric cargo options.

Tractor sales saw a healthy bump, growing 7.56% year-on-year to 60,915 units. Positive farm sentiment and early summer procurement helped sustain momentum in the agri-focused segment.

Challenges and Business Outlook

Despite the overall uptick, dealers warned that the auto industry could face a mix of headwinds. While urban demand remained steady, challenges such as rising EMIs due to the new OBD 2B emission compliance costs and tighter lending norms—particularly for two-wheeler buyers—continue to pose concerns.

“We’re seeing stricter credit checks, higher CIBIL score requirements, and increased down-payment demands from financiers,” Vigneshwar added.

For May, FADA projects steady yet muted activity in the PV market, as customers await new launches and contend with elevated borrowing costs. In the two-wheeler segment, seasonal tailwinds from weddings and farm income are expected to support enquiries, though extreme summer temperatures and school holidays may dampen showroom visits