Auto sales fall 4% in July; PV, two-wheeler demand drags retail volumes

Passenger vehicle and two-wheeler sales saw Y-o-Y declines in July even as tractor sales rose 11% and commercial vehicle demand held steady, says Fada

Domestic automobile retail sales in July fell 4 per cent year-on-year due to softer demand for passenger vehicles and two-wheelers, the Federation of Automobile Dealers Associations (Fada) said on Thursday.

 

Total vehicle registrations dropped to 1,964,213 units last month, down from 2,052,759 units in July 2024. Fada attributed the dip largely to a high-base effect. Passenger vehicle (PV) sales saw a modest decline to 328,613 units from 331,280 units a year ago.

 

Fada noted that while auspicious delivery dates, targeted schemes, and rural marketing helped support demand in hinterlands, urban sentiment remained muted amid cautious consumer behaviour.

 

With inventory levels stable at around 55 days, the association called for calibrated discounting, improved finance facilitation, and enhanced urban outreach to bolster festive season growth.

  

Two-wheeler sales drop 6% on rural weakness  Two-wheeler registrations declined by 6 per cent year-on-year to 1,355,504 units in July. According to Fada, rural footfall weakened due to ongoing sowing activities and extended heavy rainfall, which disproportionately affected demand outside urban centres. 

Automobile retail sales declined 4 per cent year-on-year in July

 

However, dealers expressed optimism for a recovery post-monsoon, as many potential buyers deferred purchases to August ahead of the festive period. Fada highlighted the importance of strategic stock alignment and tailored rural–urban engagement to revive momentum.

 

Commercial vehicles post marginal uptick 

Retail sales of commercial vehicles edged up to 76,439 units in July from 76,261 units a year earlier. Fada said urban demand, aided by new model launches, institutional orders, strong marketing, and timely stock availability, drove the marginal growth.

 

Targeted schemes also pushed up school bus sales. However, rural demand was fragmented due to seasonal weakness in cement, coal, and construction logistics, compounded by heavy rainfall and delayed financier disbursements.

 

Tractor sales jump 11% amid monsoon support 

Tractor registrations rose 11 per cent year-on-year to 88,722 units in July. Fada cited timely release of enhanced agricultural subsidies, favourable monsoon conditions, and improved rural liquidity as factors driving increased purchase intent.

 

On the business outlook, the dealers’ body noted that the monsoon outlook through September appeared broadly supportive from an agrarian demand perspective.