February Auto Sales Were Down 7%, Dealers Face OEM Inventory Push: FADA

A 7% year-over-year (y-o-y) drop in car retail sales for February 2025 was reported by the Federation of Automobile Dealers Associations (FADA), underscoring the industry's continued difficulties. Original equipment manufacturers (OEMs) are continuing to push stock above market demand, which is causing dealers across to struggle with growing inventory levels.

The most recent car retail statistics from FADA shows a decline in all of the key segments. From 1,444,674 units in February 2024 to 1,353,280 units in February 2025, two-wheeler sales fell by 6%. Sales of three-wheelers dropped 2% to 94,181 units from 96,020 units the previous year. According to the research, dealerships are experiencing financial difficulty as a result of inventory levels in the PV market reaching 50–52 days. Similar to this, urban retail sales of two-wheelers fell by 7.38%, which was a greater reduction than the 5.5% observed in rural areas, where the impact was lessened by agricultural growth and seasonal wedding demand.

 45% of dealers anticipate increase owing to approaching festivals like Holi and Gudi Padwa to the start of Navratri, as well as year-end financial incentives, according to FADA, which says dealers are cautiously optimistic about March 2025 despite the current slowdown.

  "However, challenges remain, as five consecutive months of declining stock markets have dampened consumer confidence—with investors closing more systematic investment plans (SIPs) rather than opening new ones and reduced discretionary spending driven by dented profitability," the highest body for car dealers states.