FADA reports 5 pc (YoY) growth of auto sales in May 2025

NEW DELHI: The Federation of Automobile Dealers Associations (FADA) on Friday released vehicle retail data for May, which revealed a modest rise of 5 per cent as compared to the same month last year.

Segment-wise, two-wheeler was the best category, registering a rise of 7.3 per cent on a year-on-year basis, followed by three-wheeler (rise of 6.2 per cent), and the tractor segment registered a gain of 2.7 per cent on yoy basis. On the flip side, the passenger vehicle segment, construction equipment and commercial vehicle declined by 3.1 per cent, 6.3 per cent, and 3.7 per cent, respectively.

According to FADA, robust semi-urban/rural demand, driven by auspicious marriage dates, strong Rabi harvest and pre-monsoon pull helped the two-wheeler segment register a year-on-year rise. On the other side, financing constraints in the economy segment cap upside, which led to a decline of nearly 2 per cent in the segment.

The passenger vehicle segment suffered a decline, on ‘elevated inventory days and subdued consumer sentiment —particularly in entry-level models — compounded by war-related tensions for border-state (J&K, Punjab, Rajasthan, Gujarat) and margin-money challenges; healthy bookings offset by weak retail conversions”, FADA said.

“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”, said FADA president C S Vigneshwar.

Additionally, ‘muted freight cycles and tight liquidity weigh on truck and passenger-carrier demand; bus sales provide limited relief, while wholesales accelerate into June ’25 A/C-cabin regulations’ caused a deceleration in the commercial vehicle segment.

However, FADA projects that global supply chain headwinds (rare-earth constraints in EV components, geopolitical tensions) may limit urban consumer sentiment and exert cost pressure. Additionally, “Monsoon forecast 106 per cent of LPA signals renewed rural liquidity and stronger farm incomes, supporting 2W/trac traction in semi-urban and hinterland markets”, FADA said. (ANI)