Monsoon Hope Meets Metal Headwinds: FADA Flags Mixed Signals in June Auto Retail

India’s auto retail sector posted modest year-on-year growth in June 2025, but the Federation of Automobile Dealers Associations (FADA) has struck a cautiously optimistic tone heading into Q2. According to FADA’s latest update, passenger vehicle (PV) sales rose 4.84% YoY, two-wheelers climbed 4.73%, and commercial vehicles (CVs) grew 6.60%, signaling resilience despite macroeconomic headwinds.

 

However, dealer sentiment has tilted toward a slowdown, with concerns over rare-earth material shortages, geopolitical tensions, and spillover effects from US tariff policies. These factors have stalled component production, especially in the EV and premium segments, leading to inventory mismatches and delayed deliveries.

 

On the brighter side, FADA expects above-normal monsoon rains to revive rural demand, particularly for two-wheelers and entry-level PVs. The association emphasized the need for OEMs to manage inventory prudently, as PV stock levels remain elevated at 62–67 days.

 

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Source: Business Standard – FADA June 2025 Auto Retail Update | FADA Official Release – June 2025 Vehicle Retail Data