India’s Auto Retail Surges 6.6% in January, But February Faces Headwinds: FADA

India’s auto retail sector kicked off 2025 with a 6.6% year-on-year surge in January, driven by resilient demand across two-wheelers, passenger vehicles, and commercial segments, as per the Federation of Automobile Dealers Associations (FADA). However, persistent cash-flow challenges and subdued industrial activity threaten to temper growth momentum.
Dealers remain cautiously optimistic for February, with 46% anticipating growth fueled by new launches and rural recovery, while 43% expect flat sales amid inflationary pressures. A smaller 11% foresee declines, citing supply-chain bottlenecks. FADA warns that uneven rural demand and inventory pile-ups could cap upside potential despite improving sentiment.
The sector’s mixed outlook underscores its fragile recovery from December’s 12% YoY slump. Stakeholders now eye policy measures in the upcoming Union Budget to ease liquidity strains and boost infrastructure spending.
Source: Federation of Automobile Dealers Associations (FADA)