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Yahoo
2 days ago
- Automotive
- Yahoo
Monsoon season and tight lending curb India's vehicle market
India's Light Vehicle (LV) wholesale figures for June totaled approximately 365k units, representing an 8% month-on-month (MoM) decrease and a 6% year-on-year (YoY) decline. Passenger Vehicle (PV) sales accounted for 313k units, indicating reductions of 8% MoM and 6% YoY. At the same time, demand for Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6T reached 52k units, marking decreases of 5% MoM and 4% YoY. The PV segment, in particular, saw diminished demand from urban consumers. Factors such as the monsoon season and more stringent lending practices contributed to the overall market contraction. Retail sales of PVs and LCVs in June saw a marginal 1% MoM decrease to 342k units, compared to 347k units in May and 397k units in April, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales dipped by a slight 1% MoM, while LCV sales remained unchanged. 'Heavy rains and tight market liquidity impacted foot traffic and conversion rates, despite elevated incentive schemes and fresh bookings providing selective support,' stated FADA President C.S. Vigneshwar, commenting on PV sales. As a result, PV inventory levels stood at approximately 55 days at the end of June, an increase from 52-53 days in May and 50 days in April. For H1 2025 as a whole, LV sales approached 2.5 million units, reflecting a modest increase of 1% YoY. This figure included 2.1 million PVs (+2% YoY) and 344k LCVs (-2% YoY). Our partner, Oxford Economics (OE), has revised India's economic forecast upward by 0.1 pp, with GDP growth now projected at 6.5% for the fiscal year 2024-25. This projection is bolstered by a robust 7.4% YoY increase in Q1. While public capital expenditure has driven initial growth, private investment and household consumption are exhibiting signs of softening, particularly in rural areas, despite favorable conditions from an early monsoon and declining food and energy prices. Furthermore, the Reserve Bank of India has enacted a series of rate cuts, including a notable 50 bps reduction in June, which brought the repo rate down to 5.5%. These measures aim to stimulate investment amid ongoing policy uncertainty and subdued external demand. We have slightly raised our PV outlook for 2025 but have lowered our projections for LCVs for the 2025-27 period. Nonetheless, we maintain our expectation that LV sales will surpass 5 million units in 2025, marking a 2% YoY expansion. Looking ahead, we anticipate that volumes will increase to 6.8 million units by 2032. This article was first published on GlobalData's dedicated research platform, the . "Monsoon season and tight lending curb India's vehicle market – GlobalData" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
22-07-2025
- Automotive
- Yahoo
India vehicle market under pressure in May
In May, India's Light Vehicle (LV) wholesale figures experienced a 1% month-on-month (MoM) decrease, totaling 399k units, although they displayed a marginal year-on-year (YoY) growth of 1%. Passenger Vehicle (PV) sales contracted by 1% MoM to 341k units, maintaining the same level as in May 2024. Moreover, sales of Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6T stood at 58k units, marking a decline of 2% MoM but an increase of 8% YoY. Retail sales of PVs and LCVs in May plummeted by 13% MoM to 347k units, in contrast to 397k units in April and 403k units in March, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales tumbled by 14% MoM, while LCV sales fell by 5% MoM. PV volumes continued to suffer due to the entry-level segment, attributable to limited financing options and waning consumer confidence. 'Although bookings remained fairly healthy, retail conversions lagged on margin-money challenges and deferred decisions,' stated FADA President C S Vigneshwar. Additionally, escalating tensions at India's borders further exacerbated the industry's challenges. As a result, PV inventory in India increased marginally to a 52-53 days' supply at the end of May, compared to a 50-days' supply in April and 50-55 days in March, as reported by FADA. Cumulatively across the first five months of 2025 as a whole, LV sales rose by 3% YoY to 2.1 milliom units. This total included 1.8 milliom PVs (+3% YoY) and 300k LCVs (+1% YoY). In June, the Reserve Bank of India reduced interest rates by 0.5 pp to 5.5%, marking the lowest rate in three years. This latest decrease follows two previous cuts in February and April. Nonetheless, vehicle sales in June are likely to have been affected by the continued downturn in the Small Car segment as well as geopolitical tensions. Regarding the economy, our partner, Oxford Economics (OE), has slightly revised India's GDP growth forecast downward by 0.1 pp to 6.4% for 2025 and 6.5% for 2026, citing persistent effects from global trade tensions and policy uncertainties. Despite a hiatus in US-China tariffs, trade policy uncertainty continues to suppress investment confidence domestically, with business surveys signaling a decline in production and capacity utilization expectations. Meanwhile, tensions with Pakistan have temporarily eased, stabilizing the rupee and mitigating immediate risks to investor confidence. Inflation remained in check at 3.2% YoY in May, bolstered by lower food prices and a favorable monsoon forecast, while core inflation suggests increasing demand pressures. Our LV sales forecasts for India remain largely unchanged from previous projections, with volumes in 2025 expected to grow by 3% YoY, surpassing the 5 milliom unit threshold. Looking ahead, we anticipate that sales will climb to 6.8 million units by 2032. This article was first published on GlobalData's dedicated research platform, the . "India vehicle market under pressure in May – GlobalData" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Times of Oman
06-06-2025
- Automotive
- Times of Oman
India: FADA reports 5% YoY growth of auto sales in May 2025
New Delhi: The Federation of Automobile Dealers Associations (FADA) on Friday released vehicle retail data for May, which revealed a modest rise of 5 per cent as compared to the same month last year. Segment-wise, two-wheeler was the best category, which performed, registering a rise of 7.3 per cent on a year-on-year basis, followed by three-wheeler (rise of 6.2 per cent), and the tractor segment registered a gain of 2.7 per cent on yoy basis. On the flip side, the Passenger Vehicle segment, Construction Equipment, and Commercial Vehicle declined by 3.1 per cent, 6.3 per cent, and 3.7 per cent, respectively. According to FADA, robust semi-urban/rural demand driven by auspicious marriage dates, strong Rabi harvest, and pre-monsoon pull helped the two-wheeler segment to register a year-on-year rise. On the other side, financing constraints in the economy segment cap upside, which led to a decline of nearly 2 per cent in the segment. The passenger vehicle segment suffered a decline, on "Elevated inventory days and subdued consumer sentiment--particularly in entry-level models--compounded by war-related tensions for border-state (J&K, Punjab, Rajasthan, Gujarat) and margin-money challenges; healthy bookings offset by weak retail conversions," FADA said. "Although bookings remained fairly healthy, retail conversions lagged on margin-money challenges and deferred decisions. OEMs must adopt a cautious, ground-reality-aligned approach to production planning and channel," said FADA President Mr. C S Vigneshwar. Additionally, "Muted freight cycles and tight liquidity weigh on truck and passenger-carrier demand; bus sales provide limited relief, while wholesales accelerate into June '25 A/C-cabin regulations," caused a deceleration in the commercial vehicle segment. However, FADA projects that global supply-chain headwinds (rare-earth constraints in EV components, geopolitical tensions) may limit urban consumer sentiment and exert cost pressure.
