The Federation of Automobile Dealers Associations (FADA) has released its vehicle retail data for FY25 and March 2025, offering a comprehensive look into the performance of India’s auto retail sector. Among the notable takeaways is the growing relevance of the Northeast region in the national automotive landscape, particularly in two-wheeler and rural passenger vehicle (PV) segments. As India cautiously enters FY26 amid EV disruption and global economic volatility, FADA’s regional insights underscore both opportunities and structural challenges in Northeast India’s auto retail economy.
According to internal data shared with Business North East, India's overall auto retail grew by 6.46 per cent in FY25, with two-wheelers registering a 7.71 per cent rise and PVs growing by 4.87 per cent. However, the most revealing aspect of the data is the strong rural performance, a trend that holds special relevance for the Northeast.
Two-wheeler sales in rural areas outpaced urban growth (8.39 per cent vs 6.77 per cent), and PVs showed a similar trend (7.93 per cent in rural vs 3.07 per cent in urban). This aligns with the consumer behaviour in the Northeast, where rural and semi-urban markets dominate the automotive demand structure.
“Dealers in Assam, Meghalaya, and Nagaland have witnessed stronger traction in two-wheelers and entry-level PVs, largely driven by improved rural incomes and last-mile mobility needs,” said a senior member from FADA Assam on condition of anonymity.
While specific profitability ratios by segment in the Northeast remain under wraps, regional trends suggest that two-wheelers continue to be the most profitable category, particularly due to higher rural uptake, lower inventory holding costs, and lower credit risk compared to PVs or commercial vehicles (CVs). EV two-wheelers, which saw a national penetration of 6.1 per cent are becoming a small but growing profit centre for dealers in Assam and Tripura, especially in urban pockets.
“Electric scooters have seen higher inquiries post-March due to rising fuel prices and promotional incentives. While the margins are thinner, the volume game is beginning to make sense,” said Dipankar Kalita, a two-wheeler dealer based in Tezpur.
However, CV sales remained flat nationally (-0.17 per cent), with a sharper rural decline (-0.9 per cent). FADA’s data shows that freight demand and infrastructure activity remain patchy, limiting dealership profitability in the segment. In hilly terrain like Arunachal and Manipur, CVs are further constrained by road connectivity and financing gaps.
EV adoption in the Northeast is still in its early phase but showing promise. EV penetration across India reached 7.8 per cent in FY25, with 2W at 6.1 per cent and PVs at 2.6 per cent. For Northeast dealerships, EV adoption is largely concentrated in scooters, e-rickshaws, and select urban EV PVs.
FADA, recognising this transition, is gradually aligning its advocacy to include EV-related dealership support, from battery swap infrastructure to policy lobbying for subsidies and tax relaxations at the state level.
“As EV volumes grow, FADA will need to push for region-specific policies, especially in the Northeast, where power infrastructure, charging networks, and OEM support are still catching up,” said Arvind Goyal, Director-2W at FADA.
One recurring issue across regions, including the Northeast, has been excessively high OEM targets and rising inventory days, particularly for PVs. In March 2025, PV stock levels hit 50–55 days, straining dealership working capital.
“In small towns like Dibrugarh or Silchar, moving slow-selling variants is becoming difficult. Yet, OEMs are pushing fixed targets without factoring regional demand curves,” said a dealership owner in Upper Assam.
FADA has acknowledged these concerns and is working with OEMs to bring in mutual target-setting frameworks. This is especially critical in low-density regions like the Northeast, where overstocking can severely impair profitability.
The report also flags growing concerns over global trade tensions, which are already impacting disposable incomes and mutual fund-driven consumption in metros. While the direct impact on the Northeast is comparatively muted due to its still-developing financial footprint, the indirect effects, such as inflation and weak credit flow, are already being felt.
ALSO READ: India in Reasonably Good Spot; Retail Investors Should Stay Invested For Long: SEBI Chairman
Financing remains a constraint across India, but Northeast dealers face an added challenge: fewer NBFCs and cautious banking behaviour, especially for commercial and electric vehicles.
“Dealers are pressing for RBI rate cuts and state-level credit facilitation schemes,” noted a FADA member from Guwahati. “Otherwise, we risk stagnation even in high-potential areas,” the member added.
Despite the mixed signals, FADA retains cautious optimism for FY26. It projects mid-to-high single-digit growth in 2W and low single-digit growth in PV and CV segments. Much of this depends on new model launches, EV product diversification, and financing support, particularly in semi-urban and rural belts.
For the Northeast, the way forward could include customised dealership models, EV-focused retail incentives, and digitally enabled outreach to remote customers. FADA’s growing emphasis on regional consultation could position the Northeast not just as a consumption hub but also as a testbed for inclusive mobility innovation.
FIRST Business Portal addressing the potential of business capability of North East Region.
