Car sales decline for 4th consecutive month in May
Ahmedabad: The downward trend of passenger car sales in Gujarat continued in May 2025, primarily impacted by rising vehicle prices, restrained consumer sentiment, and the ripple effects of the recent stock market crash.
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According to the latest data from the Union Ministry of Road Transport and Highways (MoRTH), four-wheeler registrations fell 4% year-on-year, from 24,847 units in May 2024 to 23,843 last month, marking the fourth consecutive month of slowing sales momentum.
From steep price hikes to vanishing discounts, several headwinds are keeping first-time buyers away from showrooms. "The entry-level segment has virtually disappeared.
The typical first-time buyer — usually opting for a hatchback or compact — is no longer walking in. Affordability is the key issue. Incomes didn't keep pace with car prices. The cheapest entry-level model at our showroom cost Rs 3.6 lakh (ex-showroom) in 2020; today, it's Rs 4.93 lakh," said Jigar Vyas, CEO of a city-based car dealership.
"Frequent price hikes and mandatory safety upgrades like six airbags pushed up entry-level costs further," he added.
Even India's largest carmaker, Maruti Suzuki, reported a 5.6% drop in overall domestic passenger vehicle sales in May, with its budget-friendly mini and compact models — including the Alto, WagonR, Swift, and Baleno — falling 12.6%. Dealers say the slump is largely concentrated in the mass segment, while premium and hybrid models continue to attract buyers.
Rising demand for pre-owned vehicles is also denting sales of entry-level cars.
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"With organised players entering the used-car space, buyers now have access to reliable, well-financed vehicles at lower costs. Many opt for a bigger pre-owned car instead of a new entry-level model at a similar price point," said Pranav Shah, chairperson of the Federation of Automobile Dealers' Associations (FADA) – Gujarat.
Dealers further cited tensions between India and Pakistan as another factor behind consumer caution.
"Many buyers didn't recover from market losses, and the geopolitical situation made them even more wary. Overall, spending remains very cautious," Shah added.
Industry players are now pinning their hopes on Rath Yatra for car purchases. The sluggish sentiment extended to the two-wheeler segment, which grew just 1.8% in May—93,983 units sold versus 92,278 a year ago. Dealers expect rural sales to pick up in the coming months, aided by forecasts of a normal monsoon.
(GFX sent to designers)
Box: Vehicle Sales
Category May-24 May-25 % Change
Four-Wheeler 24,847 23,843 -4.0
Two-Wheeler 92,278 93,983 1.8
Source: MoRTH
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