Indian Auto Sales Surge 9.6% in May Amid Monsoon Optimism
Indian retail auto sales rise 9.6% in May; dealers see monsoon-driven demand ahead
Image: The Economic Times
India's automobile retail sales increased by 9.6% year-on-year in May, reaching 25.31 lakh units. Dealers anticipate sustained growth driven by rural demand and upcoming Kharif sowing, despite challenges from fuel prices and heatwaves. Passenger vehicles saw a notable 23.3% rise in sales.
- 01Total vehicle registrations reached 25.31 lakh units in May, marking a 9.6% increase from last year.
- 02Passenger vehicle sales surged 23.3%, with rural markets outperforming urban areas at 30.4% growth.
- 03Two-wheeler sales rose 7.5%, while electric two-wheelers captured 9.25% of registrations, reflecting a shift towards fuel-efficient options.
- 04Commercial vehicle sales increased 5.3%, supported by rural demand and e-commerce logistics activity.
- 05Dealers expect 50.5% growth in June, with confidence rising for the upcoming monsoon quarter.
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In May, India's automobile retail sales rose 9.6% year-on-year, reaching 25.31 lakh units, according to the Federation of Automobile Dealers Associations (FADA). This growth occurred despite challenges such as rising fuel prices and extreme heat. The passenger vehicle segment was particularly strong, with a 23.3% increase in sales, driven by robust demand in rural areas, which grew 30.4% compared to 18.8% in urban centers. Two-wheeler sales also saw a 7.5% rise, bolstered by marriage season purchases and stable consumer demand. Electric vehicles gained traction, accounting for 6.6% of passenger vehicle sales. Looking ahead, dealers are optimistic about sustained growth due to expected improvements in rural cash flow and agricultural activity from the advancing monsoon. Over 50% of dealers anticipate growth in June, with expectations of stronger sales through the monsoon quarter, although they remain cautious about potential risks from ongoing macroeconomic pressures.
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The rise in auto sales indicates improving economic conditions in rural areas, which could lead to increased consumer spending and investment in vehicles.
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