Cautious sentiments pull brakes on car sales in Gujarat
Statistics from the union ministry of road transport and highways reveal a cautious consumer behaviour pattern. Despite the slight increase in car sales, two-wheeler purchases decreased by 1.5% compared to the previous year in Gujarat, indicating a broader deceleration in vehicle purchases. Federation of Automobile Dealers Associations (FADA) — Gujarat representatives stressed the importance of economic stability for rebuilding consumer trust.
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"The new financial year began on a modest note as overall retails in April managed to grow by 3% year-on-year across India. As the tariff war paused, stock markets showed a good pullback, putting investor concerns to rest at least for the time being. Thus, the Chaitra Navratri, Akshay Tritiya muhurats drove sales," stated FADA officials.
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"This performance reflects a discount-led market and elevated inventories — approximately a 50-day supply — amid cautious consumer sentiment that tempered enquiry-to-sale conversions. Sustained SUV demand underpinned volumes even as entry-level customers remained cautious," said Pranav Shah, chairperson, FADA — Gujarat.
"Two-wheeler costs went up in the recent past and therefore, customers are not able to accept the new prices and as a result, demand is muted. Rural demand continues to remain weak for two-wheelers as well as four-wheelers mainly due to subdued earnings," Shah explained.
Industry analysts suggest that passenger vehicle sales will remain stable but subdued, as consumers await new models and deal with high financing rates. A senior road transport office (RTO) official noted that prospective four-wheeler buyers were anticipating budget incentives, and following announcements by the Gujarat govt, electric vehicle buyers were holding off.
Despite recent improvements, the stock market volatility has contributed to the situation. "Many buyers, particularly in urban areas, rely on their stock market investments to fund large-ticket purchases, including cars. With the market in a downturn, many potential buyers have postponed their vehicle purchases because many were clearly dependent on market returns for down payments to avoid paying loans," said a city-based car dealer.
Industry specialists indicate that car sales might not show consistent growth in upcoming months without improved economic conditions.
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Box: Vehicle sales in Gujarat
Sales April 2024 April 2025 % Change
Cars 26,105 27,326 4.7
Two Wheelers 97,572 96,065 -1.5
Source: Union Ministry of Road Transport and Highways
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