Passenger Vehicle Sales Hit Record February High, Grow 1.9%: SIAM

The Indian automobile industry showed  resilient wholesale numbers, with the latest SIAM data revealing the highest-ever passenger vehicle wholesales for the month of February. However, this comes just a week after the Federation of Automobile Dealers Associations (FADA) warned of a significant deceleration in retail sales during the same month, warning of inventory buildup at dealer yards.

Total wholesale production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles reached 23,46,258 units in February 2025. Passenger vehicle sales grew by 1.9% compared to February 2024, reaching 3,77,689 units, marking the highest February sales ever for this segment in terms of factory dispatches to dealerships.

However, this growth  contrasts with retail sales data reported by FADA, which showed a decline in actual registrations across most segments in February. This discrepancy highlights the widening gap between wholesale figures (reported by SIAM) and retail numbers (tracked by FADA), as manufacturers continue dispatching vehicles to dealers despite slower consumer offtake.

Three-wheeler wholesale sales showed positive movement, increasing by 4.7% to 57,788 units compared to the same month last year. Within this category, passenger carriers and goods carriers grew by 6.8% and 5.9% respectively, though electric rickshaws and carts witnessed sharp declines of 50.9% and 30.6%.

The two-wheeler segment, which forms the bulk of India's automobile market, experienced a 9% decline year-on-year in wholesale dispatches, with sales dropping to 13,84,605 units. Motorcycles were the worst hit with a 13.1% drop, while scooters remained relatively stable with just a 0.5% decrease. Mopeds continued their downward trend with an 18.2% decline.

"Passenger Vehicles segment remained resilient and posted its highest ever sales of February in 2025," said Rajesh Menon, Director General of SIAM. He expressed optimism about the industry's near-term prospects, noting that "upcoming festivities of Holi and Ugadi in March is likely to continue to drive demand, thereby closing FY 2024-25 on a reasonably positive note."

FADA's has suggested that dealers are facing serious inventory pressures, particularly in the two-wheeler and passenger vehicle segments, with stocks reaching concerning levels in some regions. This inventory buildup indicates manufacturers may be pushing wholesale numbers to meet year-end targets despite slower retail demand.

The mixed performance reflects shifting consumer preferences and economic conditions in India's automotive market. While the passenger vehicle segment continues to show resilience in wholesale numbers despite inflationary pressures, the significant drop in two-wheeler sales and cautious retail figures indicate possible economic stress among middle and lower-income consumers.

The growth in passenger vehicle wholesale dispatches may be due to new model launches, year-end sales targets, and the increasing preference for personal mobility post-pandemic. The decline in electric rickshaws, despite the government's push for electrification, suggests challenges in the electric vehicle adoption curve at the mass market level.

The data excludes figures from luxury carmakers BMW, Mercedes, JLR, and Volvo Auto.