NEW DELHI: The auto retail sector in India witnessed a slowdown in July, with total vehicle registrations declining by 4.31 per cent year-on-year.
According to data released by the Federation of Automobile Dealers Associations (FADA), Two-Wheelers (2W) were the worst hit, reporting a 6.48 per cent decline year-on-year and a 6.28 per cent dip month-on-month.
The association noted that continued heavy rains and crop-sowing activities reduced rural footfalls, leading to deferred purchases.
For the overall decline, FADA attributed it to a high base effect from July 2024, along with weather-related challenges that impacted consumer sentiment and rural mobility.
FADA President C S Vigneshwar noted, “July’s downturn is largely due to an unusual base from last year, where sales had recovered late in the month following extreme heat and subsequent heavy rainfall.”
Passenger Vehicles (PV) also saw a year-on-year contraction of 0.81 per cent despite a 10.38 per cent month-on-month growth. The data also said the inventory in the PV segment stood at an elevated 55 days.
The Commercial Vehicle (CV) segment recorded marginal year-on-year growth of 0.23 per cent and a 4.19 per cent increase month-on-month.
As per the Fada data, the tractors emerged as the best-performing category in July, with a sharp 10.96 per cent increase year-on-year and 14.9 per cent sequential growth.
Despite July’s blip, the data said the cumulative retail sales for April-July FY26 rose 2.79 per cent year-on-year to 85.24 lakh units. The 3W and PV segments posted growth of 8.62 per cent and 2.46 per cent, respectively, while tractor sales rose 7.67 per cent in the same period.
FADA expects sales momentum to improve in August, driven by multiple festivals such as Rakhi, Janmashtami, Independence Day, and Ganesh Chaturthi, along with continued monsoon benefits.
However, it flagged risks from the recent imposition of a 25 per cent US tariff on Indian exports, rupee depreciation, and resulting import-cost pressures, which could weigh on consumer confidence and dampen discretionary spending.
Agencies