Evolving geopolitical tensions and potential spill-over from US tariff measures could temper consumer sentiment in the near term, warned the Federation of Automobile Dealers Associations (FADA) on Monday as retail auto sales fell sharply by more than 9% month-on-month in June 2025. FADA also stated that challenges in securing rare-earth materials have stalled component production, further constraining supply and retail volumes.
FADA added that as the industry enters July 2025, dealer sentiment appears tilted towards slowdown—flat and de-growth expectations (42.8% and 26.1%) exceed growth forecasts (31.1%). Similarly, booking-pipeline traction remains uneven—only 21% of 2W, 38% of PV and 32% of CV dealers report healthy enquiry flows.
In the 2W arena, early monsoon showers and renewed rural activity have spurred interest, yet heavy rainfall, variant shortages and price increases effective July are moderating conversions. The dataset highlighted that 2W sales fell 12.48% month-on-month in June 2025 to 1,446,387 units.
Passenger vehicle faces high-base effects, limited new-model launches and tight financing, offset in part by festival planning and fresh incentive schemes, said FADA. PV retail sales fell 1.49% month-on-month to 297,722 units last month.
However, total retail auto sales grew by nearly 5% year-on-year in June. Segment-wise, every category closed in the green: 2W at 4.73%, 3W 6.68%, PV 2.45%, Trac 8.68%, CE 54.95% and CV 6.6 %.
“PV retails slipped 1.49% MoM yet delivered a 2.45% YoY uplift. Heavy rains and tight market liquidity weighed on footfall and conversion, even as elevated incentive schemes and fresh bookings lent selective support,” said FADA President C S Vigneshwar.
On 2W sales, he said that while festival and marriage-season demand provided a boost, financing constraints and intermittent variant shortages moderated sales. Early monsoon rains and rising EV penetration also shaped buying patterns. FADA also pins hope on the monsoon and government capex to support auto sales.