H1 car sales see 12% dip; festive rebound expected

Time of India

4 hours ago

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hmedabad: Car sales in Gujarat continued to face headwinds in the first half of 2025, with registrations dropping 12.2% year-on-year, report Niyati Parikh & Himanshu Kaushik.
Between Jan and June, total registrations fell to 161,363 units from 183,866 in H1 2024, reflecting a challenging market for the automobile industry. Dealers attribute the decline to poor consumer sentiment due to the stock market crash in the initial part of the year, followed by the Indo-Pak border tensions and even the geopolitical conflicts.
Even as the Rath Yatra muhurat revved up two-wheeler sales, it failed to add momentum to passenger car sales, which remained lukewarm.
According to MoRTH data, car sales rose by a modest 8.2% during the month, totalling 23,744 units as against 21,946 units sold in June last year. While the uptick broke the trend of subdued numbers over the past five months, bringing in some momentum, dealers believe that overall sentiment in the car market is down.
"Rath Yatra is considered very auspicious for the purchase of vehicles, including two- and four-wheelers.
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While sales did increase marginally, the numbers do not reflect the kind of festive optimism that is typically seen during this time of the year. Even on the muhurat day, sales remained flat. This is mainly due to the poor sentiment among consumers and lack of confidence in spending," said Pranav Shah, Chairman of the Federation of Automobile Dealers' Association, Gujarat.
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A senior RTO officer said the car market continues to face headwinds, particularly in the entry-level segment.
"Car sales have been muted as there is a slowdown in the market. Entry-level cars have seen the most impact, as younger buyers are increasingly shifting towards SUVs and mid-segment cars. With economic uncertainty and price sensitivity still high, many buyers are waiting for a clearer picture before making purchase decisions," the officer said.
"In rural Gujarat, the agricultural economy was not performing as expected due to underwhelming summer and winter crop yields, which also affected demand for four-wheelers, especially in smaller towns and talukas," he further added.
Two-wheeler registrations jumped 18.6% year-on-year to 100,615 units, up from 84,803 in June 2024, according to data from the Union Ministry of Road Transport and Highways (MoRTH).
Still, the June boost lifted dealer sentiment, especially after a sluggish start to the year. However, the overall figures for the first half of 2025 continue to reflect a challenging market. Between January and June, car registrations in Gujarat dropped 12.2%, falling to 161,363 units from 183,866 in H1 2024.
Two-wheelers, on the other hand, continued to maintain momentum. Registrations rose 3.4% to 568,421 units in H1 2025, compared to 549,805 in the same period last year.
"Retail sentiment is gradually improving. With a good monsoon, stable fuel prices, and positive signals from the broader economy, we expect traction to pick up during Navratri and Diwali," Shah added.
Tractor sales remained muted, but most other segments are showing early signs of revival. Dealers across Gujarat are now gearing up for the festive stretch, hoping it brings the auto market firmly back into gear.