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Informist, Monday, Jul. 7, 2025

 

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--FADA: Jun total vehicle retail sales 2 mln units, up 4.8% on year 
--FADA: Jun passenger vehicle retail sales 297,722 units, up 2.5% on year 
--FADA: Jun 2-wheeler retail sales 1.45 mln units, up 4.7% on year 
--FADA: Jun CV retail sales 73,367 units, up 6.6% on year 
--FADA: Jun 3-wheeler retail sales 100,625 units, up 6.7% on year 
--FADA: Jun tractors retail sales 77,214 units, up 8.7% on year 
--FADA: Near-term view cautiously optimistic 
--FADA: PV inventory remains elevated around 53 days 
--FADA: CV sales growth robust supported by early-month deliveries 
--FADA: 2-wheeler sales showed some early-cycle softness 
--FADA: Challenges about rare-earth materials stalled auto component output 

 

NEW DELHI – Retail sales of all automobile segments recorded a year-on-year increase in June, with sharp growth seen in sales of three-wheelers and tractors, data released by the Federation of Automobile Dealers Associations showed Monday. Sales of passenger vehicles recorded the lowest growth last month, as the lobby body flagged increased inventory levels. 

 

Sales of two-wheelers, which form around 72% of the overall sales, grew 4.7% on year to 1.4 million units, but contracted 12.5% sequentially. "While festival and marriage-season demand provided a boost, financing constraints and intermittent variant shortages moderated sales," FADA President C.S. Vigneshwar said in a release. 

 

Passenger vehicle sales grew 2.5% on year but fell 1.5% sequentially to 297,722 units in June. Footfall and conversions at dealerships were impacted by heavy rains and tight market liquidity conditions, Vigneshwar said. Compulsory billing procedures by certain automakers to meet volume targets, such as automatic wholesale debits, led to an increase in inventory levels to 55 days.

 

Tractors continued to be among the better-performing segments in the automobile industry. Their retail sales grew 8.7% on year and 7.3% sequentially to 77,214 units in June. Sales of three-wheelers grew 6.7% on year but fell 3.7% sequentially to 100,625 units in June.  

 

Dealerships sold 73,367 commercial vehicles in June, 6.6% higher on year but 3% lower sequentially. Volumes got a boost due to early-month deliveries, but growth in their retail sales was restricted by monsoon-induced slowdowns while liquidity constraints dampened enquiries and conversions, FADA said.

 

"Members pointed to the impact of new CV taxation and mandatory air-conditioned cabins, which have elevated ownership costs, alongside muted infrastructure demand," Vigneshwar said.

 

OUTLOOK CONCERN

In a worrying sign for the automobile industry, FADA said that dealer sentiment now appears tilted towards a slowdown, with expectations of flat growth and a contraction in sales exceeding forecasts of growth. Pipeline traction is currently uneven, with only 21?alers of two-wheelers, 38% of passenger vehicless, and 32% of commercial vehicles reporting healthy enquiry flows.

 

Early onset of monsoon and renewed rural activity have spurred an interest in two-wheelers, but heavy rainfall, variant shortages, and early monsoon showers are leading to a moderation in conversions. 

 

High base effect, limited model launches, and tight financing are impacting passenger vehicle sales, but festival planning and fresh incentive schemes are lending some support, FADA said. Muted infrastructure demand and higher ownership costs are impacting sales of commercial vehicles, it added. 

 

"Overall, July is likely to witness mixed fortunes—driven by agrarian tailwinds and school reopenings, yet tempered by seasonal headwinds, elevated price points and liquidity constraints," FADA said. The industry body is cautiously optimistic in the near term, it added. 

 

In the near term, the industry body expects above-normal monsoon rains to bolster rural demand, but flagged concerns of logistical complexities which could be felt in heavy-to-very heavy precipitation zones. Construction equipment and commercial vehicles could benefit from robust government capital expenditure expected in June, July, and August which targets roads, railways, metros, and green energy projects. 

 

"Challenges in securing rare-earth materials have stalled component production, further constraining supply and retail volumes," Vigneshwar said.  

 

In the June quarter, dealerships recorded retail auto sales growth of 4.9% on year, having sold 6.5 million units overall. Two-wheeler sales grew 5% on year to 4.8 million units in Apr-Jun, while three-wheeler sales grew 12% on year to 304,869 units.

 

Commercial vehicle sales grew only 1% on year to 235,130 units in the latest quarter but construction equipment sales grew 11% to 20,988 units. Passenger vehicle sales grew 2.6% on year to 971,477 units. Dealerships recorded retail sales of 210,174 tractors in the June quarter, up 6.3% on year.

 

"While 2W (two-wheelers) showed some early-cycle softness (in the June quarter), we remain confident of a robust ramp-up in the coming months as seasonal demand and targeted OEM (original equipment manufacturers') initiatives take effect," Vigneshwar said.  End

 

Reported by Anand JC

Edited by Tanima Banerjee

 

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