India’s auto retail market registered a 4.84% year-on-year growth in June 2025, driven by robust demand in the two-wheeler and commercial vehicle segments, according to the Federation of Automobile Dealers Associations (FADA). Retail volumes across categories reached 20,03,873 units, up from 19,11,354 units in June 2024, despite challenges such as early monsoon impact, tight financing conditions, and elevated inventory levels.
Compared to May 2025, however, overall sales declined by 9.44%, reflecting typical seasonal moderation and liquidity concerns.
Segment-wise, two-wheeler sales grew 4.73% YoY but fell 12.48% month-on-month. Passenger vehicle (PV) sales recorded a modest 2.45% YoY increase, while commercial vehicles (CV) rose by 6.60%. The tractor segment posted an 8.68% YoY growth, and construction equipment surged by a significant 54.95%.
“June reflected healthy growth despite macroeconomic headwinds. Rural demand was supported by early rains, but issues like financing hurdles, price hikes, and limited variant availability continued to weigh on momentum,” said FADA President C S Vigneshwar.
Inventory levels continued to remain elevated in June, with passenger vehicle (PV) stock averaging around 55 days, reflecting sluggish booking trends. Dealers across segments reported muted customer interest, with enquiry levels at just 21% for two-wheelers, 38% for PVs, and 32% for commercial vehicles (CVs).
Retailer sentiment remained cautious, with 43% of dealers expecting flat sales and 26% anticipating a decline in July. Despite these concerns, FADA maintained a “cautiously optimistic” outlook for the near term, supported by strong government capital expenditure, forecasts of an above-normal monsoon, and signs of rural demand recovery.
However, the association flagged several potential challenges ahead, including rare-earth material shortages, geopolitical uncertainties, and rising vehicle ownership costs, which may impact market stability going forward.
