Auto sales see 5% rise in May 2025: FADA

New Delhi

India's auto sales grew by 5% in May 2025 compared to the same month last year, the Federation of Automobile Dealers Associations (FADA) reported on Friday. The two-wheeler segment led the gains with a 7.3% year-on-year rise, followed by a 6.2% increase in three-wheeler sales. Tractor sales grew by 2.7%.

FADA credited the growth to strong rural demand, a good Rabi harvest, and pre-monsoon purchases. Festive wedding dates also boosted two-wheeler sales. However, the passenger vehicle, construction equipment, and commercial vehicle segments saw declines of 3.1%, 6.3%, and 3.7% respectively.

FADA noted financing challenges and weak consumer sentiment impacted entry-level passenger vehicles. Tensions in border areas such as Jammu & Kashmir, Punjab, Rajasthan, and Gujarat also affected retail sales.

"Bookings were healthy, but actual sales lagged due to margin-money concerns and buyer hesitation," said FADA President C. S. Vigneshwar.

Commercial vehicle demand was also hurt by sluggish freight movement and tight liquidity. However, bus sales rose slightly ahead of new air-conditioned cabin rules effective June.

Looking ahead, FADA expects rural demand to stay strong, supported by a forecasted above-normal monsoon and improved farm income. Yet, geopolitical risks and EV supply-chain issues could affect urban sales and increase costs.