Auto Retail Sales See 9% Growth in June Quarter FY25

The Federation of Automobile Dealers Associations (FADA) reported a 9% year-on-year increase in automobile retail sales for the June quarter of FY25. Despite strong bookings and customer flow, challenges such as high competition, extreme heat, and market liquidity issues impeded sustained growth across different vehicle segments.

Automobile retail sales experienced a notable 9 per cent year-on-year growth in the June quarter of FY25, according to the dealers' body Federation of Automobile Dealers Associations (FADA) on Monday.

Overall retail sales climbed to 61,91,225 units from 56,59,060 units in the same period of FY24. Passenger vehicle retails saw a modest growth of 2.53 per cent to 9,20,047 units compared to 8,97,361 units a year earlier.

FADA President Manish Raj Singhania remarked, 'Despite strong bookings and customer flow, elevated competition, excess supply, and discounting posed challenges for sustained growth in the passenger vehicle segment.' He also noted significant impacts from elections, extreme heat, and market liquidity issues.

The extreme heat led to an 18 per cent drop in showroom walk-ins in May, with inventory levels hitting an all-time high of 62-67 days by June end. 'Despite improved product availability and substantial discounts designed to stimulate demand, market sentiment remained muted due to the extreme heat and delayed monsoons, resulting in a 15 per cent decrease in walk-ins,' he added.

Two-wheeler retails jumped 12.56 per cent to reach 45,54,255 units in the April-June period, as opposed to 40,46,169 units in the previous year. 'The recovery in the two-wheeler segment is promising, largely driven by emerging performance in rural areas, although these are early trends,' Singhania commented.

Even so, this segment faced significant challenges with an 18 per cent drop in showroom visits in May and June due to extreme heat and election activity.

Three-wheeler sales grew by 11.36 per cent to 2,72,691 units in the first quarter from 2,44,878 units in the same period last fiscal. Conversely, commercial vehicle retail sales witnessed a marginal rise, reaching 2,46,513 units compared to 2,44,834 units previously.

'The commercial vehicle segment experienced a slowdown because of the elections and a pause in infrastructure projects. April's elections dampened sentiment, delaying expansion plans. Additionally, limited financing options and regional challenges, such as water scarcity, further affected performance,' Singhania explained.

Tractor retail sales, however, decreased by 12.44 per cent to 1,97,719 units from 2,25,818 units a year earlier. The industry body reaffirmed its commitment to advocating for prudent inventory control, improved financing options, and strategic planning to ensure the auto retail sector's resilience and sustained growth.

The Federation of Automobile Dealers Associations (FADA) represents over 15,000 automobile dealerships, operating more than 30,000 sales outlets nationwide.

(With inputs from agencies.)