“June is traditionally one of the weakest months for India’s auto retail. This year, while the monsoon progressed normally up to Maharashtra, it lost momentum, delaying rains in West Bengal, Bihar, Uttar Pradesh, Chhattisgarh, and Madhya Pradesh. This exacerbated the effects of a severe heatwave in northwest India, contributing to a prolonged hiatus that not only intensified the heatwave but also delayed the sowing operations of kharif (summer sown) crops in northern and north-western regions, thereby impacting rural sales," FADA president Manish Raj Singhania says.

Among all categories, the two-wheeler category faced significant challenges, with a MoM sales decline of 10.36%. Factors attributed to low sales are extreme heat, which resulted in 13% fewer walk-ins; stalled monsoons; and election-related market slowdowns, which particularly affected rural sales from a 59.8% drop in May to 58.6% in June.

The commercial category sales also fell 12.42% on MoM basis. "June presented various challenges, including delayed monsoons, poor market sentiment and postponed purchases due to low demand and funding delays. The industry continues to face degrowth, impacted by high temperatures affecting the agricultural sector and infrastructural project slowdowns,” says FADA.

The apex auto body says inventory levels have reached an all-time high, ranging from 62 to 67 days. "Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to extreme heat resulting in 15% less walk-ins and delayed monsoons. Dealer feedback highlights challenges such as low customer inquiries and postponed purchase decisions."

FADA has urged PV OEMs to implement prudent inventory control and engage proactively with the market. In its outlook, the body says the southwest monsoon has covered the entire country ahead of schedule, boosting prospects for Kharif sowing. "The newly elected government’s increase in minimum support prices (MSPs) for kharif crops is expected to improve disposable incomes in rural India, potentially enhancing auto retail performance. However, dealer feedback across segments presents a cautious picture."

auto sale data

India’s PV sales dip 6.7% in June as overall auto retail growth modest