Indian retail car sales fall in June amid heatwaves, says dealers’ body By Reuters

BENGALURU (Reuters) – Retail sales of cars in India fell in June for the second straight month as heatwaves across the country deterred customers from purchases despite “substantial discounts”, a dealers’ body said on Friday.

Passenger vehicle sales fell 6.8% year-on-year in June, a steeper drop than the 1% decline in May, according to data from the Federation of Automobile Dealers Association (FADA), which tracks monthly retail sales from dealers to buyers.

WHY IT’S IMPORTANT

Auto sales are seen as a key indicator of private consumption in India. India’s auto industry forms 7% of the country’s GDP, as per government data.

CONTEXT

The intense heat in northern India has reduced footfall at dealerships and led to fewer people buying cars, according to analysts.

This especially hurt small cars and electric vehicles.

Subdued retail demand also led to muted wholesales for some carmakers, according to analysts. Tata Motors (NYSE:) attributed the drop to the impact of the Indian elections, in addition to the weather.

Mahindra & Mahindra also posted weaker-than-expected overall June wholesale growth.

Analysts said concerns around how the government’s policies could affect peoples’ income might discourage consumers from buying vehicles and hurt automakers’ sales to dealerships.

Still, the SUV portfolios of companies, including Maruti Suzuki, benefitted from strong demand, extending the record-high sales seen in the financial year 2024.

KEY QUOTES

“Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to extreme heat resulting in 15% less walk-ins. Dealer feedback highlights challenges such as low customer enquiries and postponed purchase decisions,” FADA President Manish Raj Singhania said in a statement.

BY THE NUMBERS

Category Total June Y/Y change Y/Y change

sales in June in May (%)

(units) (%)

Overall 1,895,552 0.7 2.6

sales

Passenger 281,566 -6.8 -1

Vehicles

(cars)

Two-wheele 1,375,889 4.7 2.5

rs

Three-whee 94,321 5.1 20.1

lers

Commercial 72,747 -4.7 4.1

vehicles

Tractors 71,029 -28.4 -1.1