Fine rainy spell & capex push help lift vehicle sales in June
Federation of Automobile Dealers Associations
(FADA) from the Vahan portal of the ministry of road, transport & highways (MoRTH).
Two-wheeler sales rose by 4.7% to over 1.44 million units last month, while three-wheelers, tractors, and construction equipment recorded increases of 6.7% (100,625 units), 8.7% (77,214 units) and 55% (8,558 units), respectively. FADA president CS Vigneshwar termed auto retails in June as "healthy".
As per initial industry estimates, carmakers dispatched fewer vehicles last month-about 320,000 units compared to the year-ago period-to align stocks in the channel.
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In the two-wheeler segment, while festival and marriage-season demand provided a boost to sales, financing constraints and intermittent variant shortages dampened overall volumes. Early onset of monsoons and rising EV penetration also shaped buying patterns.
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Distributors are cautiously optimistic of the momentum picking up in the coming festive period, amid prevailing geopolitical challenges. "Several dealers cited compulsory billing and forced stock lifts-often via auto-debit wholesales-leading to mandated high days of inventory aligned with festival-season targets," said Vigneshwar. "Overall, June demonstrated a resilient two-wheeler performance amid mixed market signals."
In the passenger vehicle segment too, heavy rains and tight market liquidity weighed on customer footfalls and sales conversion, even as elevated incentive schemes and fresh bookings lent selective support. Inventory in channel is at around 55 days.
Meanwhile, early-month deliveries buoyed truck and bus sales before monsoon-induced slowdowns, while liquidity constraints dampened enquiries and conversions. Dealers said there was some adverse impact of new CV taxation and mandatory air-conditioned cabins, both of which increased ownership costs. In the near term, above-normal monsoon rains-forecast at over 106% of the long period average in July, with regional variances-should bolster rural demand even as regions with heavy rainfalls could offer logistical complexities, FADA said.
Early Kharif sowing augurs well for farm incomes and two-wheeler intake in rural markets. Robust government spending in the June-August period in road, railway, metro, and green-energy projects will likely underpin the CV and construction equipment segments.
However, Vigneshwar said evolving geopolitical tensions and potential spillover from US tariff measures warrant vigilant supply-chain management and could temper consumer sentiment. "Also, challenges in securing rare earth materials have stalled component production, further constraining supply and retail volumes," he said.
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