India’s automobile sales cross 20 lakh units in June, Rise 4.84pc YoY amid festive and rural demand

THEBUSINESSBYTES BUREAU

NEW DELHI, JULY 7, 2025

India’s overall automobile retail sales across all vehicle segments rose 4.84 per cent year-on-year in June 2025, crossing the 20.03 lakh mark, according to data released by the Federation of Automotive Dealers Associations (FADA). The growth was primarily fuelled by festival and marriage-season demand, despite market headwinds such as financing constraints and supply-side disruptions.

FADA President C.S. Vigneshwar noted that every major segment registered year-on-year growth, with construction equipment leading at 54.95 per cent, followed by tractors at 8.68 per cent, commercial vehicles (CVs) at 6.6 per cent, three-wheelers at 6.68 per cent, two-wheelers at 4.73 per cent, and passenger vehicles (PVs) at 2.45 per cent. “While seasonal demand helped boost sales, challenges such as intermittent variant shortages and liquidity pressures tempered the momentum,” he said.

Passenger vehicle sales, though up 2.45 per cent compared to June last year, saw a 1.49 per cent decline on a month-on-month basis. According to FADA, the PV segment faced subdued footfall due to heavy rainfall and a cautious financing environment, though new bookings and promotional schemes helped offset some of the drag. Dealers reported pressure from certain manufacturers imposing compulsory billing mechanisms, leading to inventory levels averaging 55 days.

The commercial vehicle segment recorded a solid 6.6 per cent year-on-year growth, but saw a 2.97 per cent dip month-on-month. Early-month demand helped drive volumes before monsoon-induced slowdowns and weaker buyer sentiment took hold. “Dealers highlighted the impact of recent regulatory changes, including new taxation and mandatory AC cabins in CVs, which have significantly raised ownership costs,” Vigneshwar explained.

Looking ahead, FADA projected a mixed outlook for July, driven by the positive impact of early monsoon showers and rural market recovery, but constrained by seasonal slowdowns, rising vehicle prices, and ongoing liquidity concerns. In the two-wheeler segment, rural activity has sparked interest, yet persistent rainfall and upcoming price hikes are expected to limit conversions.

For passenger vehicles, the absence of major new launches, high base effects, and constrained financing options may slow growth, although upcoming festivals and incentive schemes could offer some support. Meanwhile, the CV segment continues to navigate elevated costs, subdued infrastructure activity, and regulatory changes, even as existing order pipelines remain a source of stability.

“Dealer sentiment appears cautious, with 42.8 per cent expecting a flat market and 26.1 per cent anticipating de-growth, compared to just 31.1 per cent forecasting growth,” FADA reported. The association concluded with a cautiously optimistic stance, aiming to leverage rural tailwinds and government-led capital expenditure, while remaining alert to disruptions from the monsoon, supply constraints, and financing pressures.