Additionally, monsoon forecast 106 per cent of LPA signals renewed rural liquidity and stronger farm incomes, supporting 2W/trac traction in semi-urban and hinterland markets,” : FADA
PUNE: Automobile dealers clocked a modest rise of 5 per cent year-on-year to 22.12 lakh units in the retail sale of total vehicles in May, buoyed by healthy two- and three-wheeler sales.
However, passenger vehicle (PV) sales bucked the trend, slipping 3.1 per cent as rising inventory and cautious consumer behaviour signalled a pause in demand recovery, the Federation of Automobile Dealers Associations or FADA data showed on Friday.
The PV registrations last month stood at 3,02,214 units, as compared to 3,11,908 units in May 2024. FADA said that customers delayed purchases in several states due to the India-Pakistan conflict. This was further compounded by softening demand for entry-level models, as per FADA.
In terms of segment-wise performance, two-wheeler remained the best category registering a rise of 7.3 per cent on a year-on-year basis at 16.52 lakh units, followed by three-wheeler which registered a rise of 6.2 per cent at 1.04 lakh units. The tractor segment registered a gain of 2.7 per cent on yoy basis at 71,992 units.
However, commercial vehicles declined by 3.1 per cent, FADA said.
FADA President CS Vigneshwar said the PV segment suffered due to “Elevated inventory days and subdued consumer sentiment–particularly in entry-level models–compounded by war-related tensions for border-state (J&K, Punjab, Rajasthan, Gujarat) and margin-money challenges and healthy bookings offset by weak retail conversions.”
But the robust semi-urban/rural demand driven by auspicious marriage dates, strong Rabi harvest, and pre-monsoon pull helped the two-wheeler segment to register a year-on-year rise.
FADA has projected that global supply-chain headwinds like rare-earth constraints in EV components, geopolitical tensions may limit urban consumer sentiment and exert cost pressure.
“Additionally, monsoon forecast 106 per cent of LPA signals renewed rural liquidity and stronger farm incomes, supporting 2W/trac traction in semi-urban and hinterland markets,” FADA said.
