AUTO MARKET UPDATES: The overall car sales in India witnessed a slight increase in January, as per m data released by automakers on February first showed, as inflation-wary customers carried on to delay purchases.

India’s automobile retail sector started 2025 on a positive note. Auto sales increased by 6.6 percent  in January compared to last year, according to FADA (Federation of Automobile Dealers Associations).

In spite of these rise, dealers have different views about the future. Around 46 percent expect sales to grow further, while 43 percent believe they will stay the same. About 11 percent think sales might decline due to market challenges.

FADA reported that all vehicle categories saw growth. Two-wheeler sales went up by 4.15 percent, helped by new launches, wedding season demand, and better financing options. Three-wheeler sales increased by 6.8 percent. Passenger vehicles saw the highest rise at 15.53 percent, as some buyers delayed purchases in December to get 2025 models.

Commercial vehicle sales grew by 8.22 percent, boosted by higher freight rates and demand for passenger carriers. However, slowdowns in cement, coal, and infrastructure sectors, along with strict financing rules, were concerns. Tractor sales also rose by 5 percent, showing stable demand in rural areas.

Inventory for passenger vehicles reduced slightly to around 50-55 days, improving the supply-demand balance. Urban car sales went up from 60.8 percent to 61.8 percent, while rural markets saw stronger growth at 18.57 percent compared to 13.72 percent in cities.

FADA remains hopeful for steady or improved sales in February. Government policies and seasonal demand may help. However, financial struggles in rural areas and weak demand in some sectors could slow growth.

Car sales in India, the third-largest car market, have  seen mixed growth after two years of fast growth due to higher inflation affecting buyers. Rising raw material costs have led carmakers to increase prices, even as they offer discounts to attract customers. The government’s plan to cut personal income tax in the budget has raised hopes of increased spending, which might encourage more people to buy cars.