India’s Vehicle Sales Rise 4.84% in June, Cross 20 Lakh Units Mark

New Delhi: Vehicle retail sales in India grew by 4.84% year-on-year in June, surpassing 20.03 lakh units, driven by seasonal demand during festivals and the marriage season, the Federation of Automotive Dealers Associations (FADA) reported on Monday.

“Every segment recorded positive growth — two-wheelers rose by 4.73%, three-wheelers by 6.68%, passenger vehicles by 2.45%, commercial vehicles by 6.6%, tractors by 8.68%, and construction equipment saw an impressive 54.95% increase,” said FADA President C.S. Vigneshwar.

He noted that while festive demand and wedding season boosted sales, factors such as financing challenges and occasional supply shortages of certain vehicle variants kept overall growth in check. Early monsoon showers and increasing electric vehicle (EV) adoption also influenced consumer buying patterns.

“Overall, June showcased resilient two-wheeler sales despite mixed signals from the market,” Vigneshwar added.

Passenger vehicle (PV) sales slipped 1.49% compared to May but registered a 2.45% year-on-year increase. Vigneshwar pointed out that heavy rainfall and tight liquidity impacted customer footfall and conversions, though incentives and new bookings provided some support.

He also highlighted that some manufacturers implemented mandatory billing practices — including automatic wholesale debits — to meet sales targets, resulting in dealer inventories of approximately 55 days. "Despite mixed market conditions, PV sales showed modest yet steady performance in June," he said.

Commercial vehicle (CV) sales dropped 2.97% month-on-month but achieved a solid 6.6% year-on-year growth. According to Vigneshwar, strong early-month deliveries lifted numbers before monsoon rains and liquidity challenges slowed down inquiries and sales.

“New taxation policies for CVs and the introduction of mandatory air-conditioned cabins have raised ownership costs. Coupled with weak infrastructure demand, this has made the CV market more challenging. Still, the segment displayed resilience, effectively navigating economic and cost pressures,” he explained.

Looking ahead to July, FADA anticipates a mixed outlook, with positive factors such as rural demand and school reopenings being countered by seasonal slowdowns, high vehicle prices, and liquidity issues.

“Dealer sentiment reflects caution — with 42.8% expecting a slowdown or flat growth, 26.1% anticipating de-growth, and only 31.1% projecting growth,” the association noted.

In the two-wheeler segment, early monsoons and rural activity have encouraged interest, though heavy rains, model shortages, and price hikes from July may slow conversions.

The PV market faces challenges from a high sales base last year, limited new model launches, and financing difficulties. However, festival demand and new incentive programs may offer some relief.

Meanwhile, the CV sector continues to battle weak infrastructure demand and rising ownership costs due to new regulations, although existing order pipelines are providing some stability.

For the near-term outlook, FADA has adopted what it describes as “cautious optimism” — focusing on leveraging rural demand and government capital expenditure while remaining prepared to manage monsoon disruptions, supply issues, and financial constraints.

With inputs from IANS