Auto retail sales rise 5% in June; passenger vehicles up 2.5%: Fada

Business Standard

07-07-2025

Retail sales of passenger vehicles saw a 2.5 per cent on year rise in June, while the overall automobile sales grew by a healthy 5 per cent against the backdrop of a high base of the last year and amid the ongoing clouds of uncertainties due to the rare earth crisis and US tariffs.
'Last month was better than expected, as we were expecting slightly lower growth. This may grow further. The positive is that the monsoon has been good, while the US tariff issue and Chinese rare metal issue were major concerns for the industry. As of now, none of the original equipment manufacturers have raised any supply shortage due to the rare earth crisis,' CS Vigneshwar, president of the Federation of Automobile Dealers Associations (Fada) said on Monday.
Vigneshwar also said that evolving geopolitical tensions and potential spillover from the US tariffs measures warrant vigilant supply chain management, and they could temper consumer sentiments.
'Also, challenges in securing rare-earth materials have stalled component production, further constraining supply and retail volumes,' the Fada president cautioned.
Meanwhile, the first quarter of the financial year 2026 (Q1FY26) saw a 2.59 per cent growth in the retail sales of passenger vehicles.
The overall passenger vehicle sales were seen up from 290,593 units in June 2024 to 297,722 units in June 2025.
The top six players including Hyundai Motor (down by 2 per cent) and Tata Motors (down 8 per cent) saw a decline in sales. Market leader Maruti Suzuki India saw a marginal rise of 0.5 per cent, Mahindra & Mahindra over 11 per cent, Toyota Kirloskar Motor over 15 per cent, and Kia India around 7 per cent during the month under review.
Segment-wise, every category closed in the green, with two-wheelers moving up by 5 per cent, three-wheelers by 6 per cent, tractors by 9 per cent, and commercial vehicles by 7 per cent, in addition to 2.5 per cent for passenger vehicles.
The overall automobile retail sales for the month of June 2025 recorded a 5 per cent growth on year to 2.004 million, up from 1.91 million in June 2024.
PV sales were up 2.59 per cent and two-wheelers at 5 per cent, alongside three-wheelers up by 12 per cent, commercial vehicles by a marginal 1 per cent, construction equipment by 11 per cent, and tractors by 6 per cent.
'While two-wheelers showed some early-cycle softness, we remain confident of a robust ramp-up in the coming months as seasonal demand and targeted OEM initiatives take effect,' Vigneshwar added.
But month-on-month (M-o-M) figures were not impressive.
PV retail sales in June slipped 1.49 per cent when compared to May.
'Heavy rains and tight market liquidity weighed on footfall and conversion, even as elevated incentive schemes and fresh bookings lent selective support. Some dealers indicated that certain PV OEMs have introduced compulsory billing procedures-- such as automatic wholesale debits-- to meet volume targets, inventory consequently stands at around 55 days. June thus painted a picture of modest but steadfast PV performance amid varied market cues,' he added.
Two-wheeler retails dipped 12.48 per cent M-o-M. While festival and marriage-season demand provided a boost, financing constraints and intermittent variant shortages moderated sales. Early monsoon rains and rising EV penetration also shaped buying patterns.
'Several dealers cited compulsory billing and forced stock lifts, often via auto-debit wholesales, leading to mandated high days of inventory aligned with festival-season targets. Overall, June demonstrated a resilient two-wheeler performance amid mixed market signals,' Vigneshwar said.
Commercial vehicle retails declined 2.97 per cent M-o-M while achieving a robust 6.6 per cent Y-o-Y expansion.