July 2025 auto retail down 4.3 per cent, PVs, two wheelers drag market performance

While all major segments showed mixed results, the decline was led by the country’s two most critical categories—passenger vehicles (PVs) and two-wheelers (2Ws)—which felt the strain of a delayed monsoon, muted urban sentiment, and high base effect from July 2024. Passenger vehiclesPassenger vehicle retails in July 2025 were at 3,28,613 units, a 0.81 per cent decline YoY from 3,31,280 units last year during the same month. The segment did recover sequentially by 10.38 per cent from June 2025 sales of 2,97,722 units. Support largely came in from rural and semi-urban areas, where demand picked up in the last half of the month due to auspicious delivery dates of the Aashaada period, an increase in new model launches, and aggressive marketing of OEMs in hinterland markets. There was momentum, but urban enquiries remained muted, and consumer sentiment was generally cautious, particularly in the metro areas. Inventory levels were just around 55 days among dealerships, and an area of concern before the upcoming festive cycle. The outlook for the segment remains cautiously optimistic. With several festivals in August and September like Rakhi, Janmashtami, and Ganesh Chaturthi, retailers look forward to a rise in footfalls as well as bookings. Also Read : Indian auto sector faces tough Q1 FY26 as costs climb and exports slow: Report Further, recent reduction in interest rates by the Reserve Bank of India (RBI), coupled with concessions by in-house financiers such as Mercedes-Benz Finance, should support to mitigate the effect of price increases announced by luxury OEMs. Dealers and original equipment manufacturers alike are now placing bets on robust festive conversion to liquidate stock and recover growth momentum. Two wheelersIndia’s volume-leading two-wheeler segment experienced a sharp fall, with retail sales dipping to 13,55,504 units in July 2025 from 14,49,487 units in July 2024, a decline of 6.48 per cent YoY. The sequential drop from June 2025, which had logged 14,46,387 units, was 6.28 per cent. The slowdown was more rural in tone, driven by heavy rain and continued crop-sowing activities that hindered movement and postponed purchasing decisions. While certain urban hubs exhibited weak resilience in demand, it was not strong enough to counterbalance the overall decline in the segment. Dealers experienced fewer-in-person visitors, fewer inquiries, and delayed deliveries as shoppers put off purchases in hopes of the upcoming holiday season’s deals. But the prospect for two-wheelers is significantly brighter in August. With several festivals falling together and rural demand pent up to return, dealers expect the segment to see a comeback. Stock is still healthy, and the manufacturers are likely to introduce promotional offers and finance schemes for first-time buyers as well as rural buyers. Once rural liquidity revives post-monsoon and sowing settles down, two-wheeler volumes may pick up steam during the peak festival season. Commercial vehiclesThe commercial vehicle (CV) segment remained largely flat with a slight 0.23 per cent YoY increase, registering 76,439 units in July 2025 compared to 76,261 units in the same month last year. MoM, the segment improved by 4.19 per cent over June’s 73,367 units. While total figures indicated stability, the underlying patterns split between city and village markets. Urban CV sales were driven by institutional orders, demand for school buses, and improved stock availability, especially during new model launches. Rural CV sales, in contrast, still struggled with weak haulage demand, poor logistics sentiment, and delays in loan disbursement to upgrade or increase fleets. Also Read : Govt aims to make Indian auto industry world’s No. 1: Nitin Gadkari Going forward, dealers feel that pending orders and government buying in some of the states can help prop up CV demand in September and August. Further, freight demand should experience some seasonal pick-up after the monsoon, particularly in the southern and western regions. However, rural CV volumes could be cautious unless cargo movement in segments such as cement, construction, and agri improves more strongly. Three wheelersThree-wheeler retail sales stood at 1,11,426 units in July 2025, a 0.83 per cent YoY growth over 1,10,511 units during the same period last year, and a robust 10.73 per cent MoM growth over 1,00,625 units in June 2025. The increase was mainly driven by the passenger three-wheeler segment, which registered a growth of 8.44 per cent YoY, indicating sustained buying of local transport vehicles in urban and semi-urban areas. Yet, the segment also indicated divergence, with e-rickshaw (passenger) volumes having fallen by 10.49 per cent YoY, possibly reflecting market saturation and limited subsidies and access to credit. Commercial activity is meanwhile reflected in goods carriers in this segment, falling by 3.29 per cent YoY. In spite of the contradictory signals, players anticipate the segment to be stable in the near future, aided by sustained demand in urban areas for affordable last-mile mobility solutions. Electric three-wheelers are likely to rebound if new financing partnerships or state-level EV incentives are introduced ahead of the festive season. Industry outlookDespite the slowdown in July, FADA’s outlook for August and the broader festive season remains cautiously optimistic. Dealers across categories are preparing for improved demand as multiple religious and cultural festivals approach, and consumer sentiment is expected to recover, particularly in rural India where the monsoon has generally been favourable. Meanwhile, external risks such as currency fluctuations, export bans, and ongoing geopolitical uncertainty continue to overshadow the forecast. According to FADA’s dealer confidence survey, 59 per cent of dealers expect growth in August, 32 per cent foresee flat sales, and only 9 per cent anticipate de-growth—a signal that the retail ecosystem is preparing for a busier second half of the year. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 07 Aug 2025, 12:45 pm IST
Source: hindustantimes.com