Global supply‐chain headwinds — from rare‐earth mineral constraints in electric vehicle (EV) components to ongoing geopolitical tensions — may keep urban consumer sentiment in check, the Federation of Automobile Dealers Associations (FADA) said on Friday while sharing the vehicle retail data for May 2025.
According to the industry body, total retail sales of passenger vehicles (PV) declined by 3.11 per cent to 3,02,214 units last month as compared with 3,11,908 units in May 2024.
“In our June survey, 55.46 per cent of members expect flat volumes, 31 per cent foresee growth, and 13.54 per cent anticipate de‐growth, underscoring a cautiously balanced demand outlook for the coming month,” CS Vigneshwar, President, FADA, said.
On PV sales performance, he said inventory days, which had hovered around 50, have edged up to around 52–53 days during May and the entry-level models were hardest hit as constrained financing and subdued consumer sentiment compounded the slowdown.
“Although bookings remained fairly healthy, retail conversions lagged on margin-money challenges and deferred decisions. OEMs must adopt a cautious, ground-reality-aligned approach to production planning and channel incentives so that dealers are not burdened by rising carrying costs or forced into excessive discounting,” Vigneshwar noted.
In the two-wheeler (2W) segment, the total retail sales grew by 7.31 per cent to 16,52,637 units in May as against 15,40,077 units in the corresponding month last year.
Dealers attributed this resilience to a higher number of auspicious marriage days, a strong Rabi harvest, and pre-monsoon demand, especially in semi-urban and rural markets, FADA noted.
“That said, financing constraints in the economy segment capped full upside potential. Looking ahead, stakeholders should continue to monitor liquidity access and model availability to preserve momentum,” Vigneshwar said.
The three-wheeler (3W) retail sales also grew by 6.28 per cent in May to 1,04,448 units as compared with 98,274 units in May 2024.
Tractor sales during the month also grew by around 3 per cent to 71,992 units as compared with 70,063 units in May last year.
However, retail sales of commercial vehicles (CV) declined by 3.71 per cent to 75,615 units during the month as compared with 78,530 units in the same month last year.
Overall, total sales across all categories grew by 5.11 per cent to 22,12,809 units in May as compared with 21,05,153 units in May 2024.