Automobile retail sales in India rose around 5 per cent year-on-year in June with all vehicle segments, including passenger vehicles and two-wheelers, witnessing growth, Federation of Automotive Dealers Associations (FADA) said on Monday.

Photograph: Carlo Allegri/Reuters

Overall automobile registrations last month stood at 20,03,873 units, up 4.84 per cent as compared with 19,11,354 units in June 2024.

Passenger vehicle (PV) retail sales rose 2 per cent year-on-year to 2,97,722 units last month as against 290,593 units in the year-ago period.

“Heavy rains and tight market liquidity weighed on footfall and conversion, even as elevated incentive schemes and fresh bookings lent selective support,” FADA president C S Vigneshwar said in a statement.

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, he added.

June thus painted a picture of modest but steadfast passenger vehicle performance amid varied market cues, Vigneshwar stated.

Two-wheeler retails rose 5 per cent year-on-year to 14,46,387 units in June.

“While festival and marriage-season demand provided a boost, financing constraints and intermittent variant shortages moderated sales,” Vigneshwar said.

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, he added.

Commercial vehicle (CV) registrations went up 7 per cent to 73,367 units in June.

Last month sales reflected a resilient CV segment adeptly navigating cost pressures and a softening economy, Vigneshwar stated.

“Early-month deliveries buoyed volumes before monsoon-induced slowdowns and constrained liquidity dampened enquiries and conversions,” he added.

Members pointed to the impact of new CV taxation and mandatory air-conditioned cabins, which have elevated ownership costs, alongside muted infrastructure demand, he said.

Three-wheeler retails increased 7 per cent to 1,00,625 units while tractor registrations rose 9 per cent to 77,214 units last month.

In the April-June period, overall retail sales increased 5 per cent year-on-year to 65,42,586 units as compared with 62,39,877 units in same period last fiscal year.

PV sales rose 3 per cent year-on-year to 9,71,477 units.

Similarly, two-wheeler registrations increased 5 per cent year-on-year to 47,99,948 units.

CV and three-wheeler retail sales rose 1 per cent and 12 per cent, respectively, in the April-June period.

Tractor registrations rose 6 per cent year-on-year to 2,10,174 units in the first quarter.

On business outlook in the near term, FADA stated that above-normal monsoon forecast at over 106 per cent of the LPA in July, with regional variances should bolster rural demand even as heavy-to-very-heavy precipitation zones introduce logistical complexities.

Early kharif sowing, up 11 per cent year-on-year to 262.15 lakh hectares, underlines stronger farm incomes and augurs well for two-wheeler uptake in the hinterlands, it added.

However, evolving geopolitical tensions and potential spill-over from US tariff measures warrant vigilant supply-chain management and could temper consumer sentiment, FADA stated.

Also, challenges in securing rare-earth materials have stalled component production, further constraining supply and retail volumes, it added.

Against this mixed backdrop, FADA adopts a stance of cautious optimism — leveraging rural demand drivers and government capex while remaining agile to navigate monsoon-related disruptions, supply constraints and liquidity pressures, it said.