Auto Industry See Modest Growth In April, Commercial Vehicles See 1 Per Cent Dip In Sales

India’s automobile retail sector registered a slight uptick in sales at 2.95 per cent in April 2025, reaching a total of 22,87,952 units, according to the Federation of Automotive Dealers Associations (FADA).

This growth was driven by festive-period purchases during Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi, and Vishu, providing a late-month boost to the sector, reported PTI.

For comparison, retail sales during the same month in the previous year stood at 22,22,463 units. All major vehicle segments recorded year-on-year growth except for commercial vehicles, which saw a slight contraction of 1.05 per cent.

Segment Performance and Market Trends

The two-wheeler category reported 16,86,774 units sold in April 2025, a 2.25 per cent increase from the 16,49,591 units in April 2024. The passenger vehicle (PV) segment also experienced a mild rise of 1.55 per cent year-on-year, moving from 3,44,594 to 3,49,939 units. Meanwhile, tractor sales expanded by 7.56 per cent to 60,915 units, and the three-wheeler category recorded a substantial 24.51 per cent jump, reaching 99,766 units compared to 80,127 units a year earlier.

Commenting on the overall performance, FADA President C S Vigneshwar said, "With the tariff war paused, stock markets staged a sharp pullback, alleviating investor concerns, and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note."

Vigneshwar also noted strong rural engagement, saying, "Dealers reported buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook, while wedding-season tailwinds sustained rural offtake."

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Mixed Signals for Passenger and Commercial Vehicles

While urban demand held steady thanks to new model launches, certain challenges persisted. "Urban demand remained robust, supported by new-model introductions, although elevated financing costs and new emission norm 'OBD2B'-linked price adjustments posed isolated bottlenecks," Vigneshwar observed.

Despite subdued new product launches, the PV segment still saw modest year-on-year growth, though it dipped 0.19 per cent on a month-on-month basis. "This performance reflects a discount-led market and elevated inventories, approximately a 50-day supply, amid cautious consumer sentiment that tempered enquiry-to-sale conversions," he explained.

High SUV demand contributed positively, though hesitancy among entry-level buyers remains a concern. Vigneshwar added, "Sustained SUV demand underpinned volumes even as entry-level customers remained cautious, underscoring the need for OEMs to recalibrate production and reduce stock levels to mitigate deeper discounts and carrying costs at dealerships." He reiterated FADA’s recommendation for a 21-day inventory standard to maintain dealer efficiency.

Meanwhile, commercial vehicle retail fell slightly to 90,558 units from 91,516 units the previous year. In contrast, the tractor market continued to thrive, reflecting strong rural fundamentals.

Cautious Outlook for May Amid Seasonal and Economic Challenges

FADA’s forecast for May remained measured. While PV sales may remain steady, high financing costs and buyer anticipation for new launches are likely to temper enthusiasm. In the two-wheeler segment, the marriage season and harvest-driven rural demand could support enquiry levels. However, tighter credit norms—including stricter CIBIL scores and higher down payments—might restrict actual sales.

“Summer heat and school holidays may further suppress showroom visits though IMD predicts that it may not be as bad as last year,” the association noted.

The commercial vehicle segment is expected to face ongoing pressure from a high base, slowing e-commerce logistics, and growing competition from electric three-wheelers. Even so, targeted incentives and upcoming infrastructure initiatives could help balance these challenges.

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