The industry body noted that job concerns in the manufacturing sector—linked to higher tariffs imposed on India by the Donald Trump administration—along with IT sector layoffs, may have negatively influenced consumer sentiment during the month. “It should have affected in July, and may hit going ahead. We really don’t know how much Donald Trump tariffs are going to affect the industry in terms of sentiments,” said C S Vigneshwar, president of Fada.
Total auto retail sales stood at 1.96 million in July 2025, compared to 2.05 million in July 2024.
The contraction in overall retail sales follows three consecutive months of growth. “India’s auto retail sector applied the brakes in July, with overall retails declining by 4.31 per cent year-on-year. This pullback largely stems from a high-base effect in July 2024, when an extreme heatwave was immediately followed by excessive rainfall, constraining volumes before a rebound later that month,” Vigneshwar added.
During the month, construction equipment witnessed a 33.3 per cent degrowth, owing to strong growth in the past two months caused by a shift in emission norms. “A lot of the customers pre-purchased in this segment due to new emission norms. This will settle going forward,” he said.
In the two-wheeler segment, July saw a 6.48 per cent year-on-year decline to 1.36 million, as crop-sowing activities and prolonged heavy rains dampened rural footfalls more sharply than urban demand. “Dealers are confident of a post-monsoon uptick, with several purchase decisions deferred to August ahead of the festive season—making strategic stock alignment and focused rural–urban engagement imperative for reviving momentum,” he added.
The passenger vehicles segment contracted by 0.81 per cent year-on-year, despite a 10.38 per cent surge in volumes on a monthly basis, driven by robust rural demand. The Aashaada period and auspicious delivery days, combined with targeted schemes, new model introductions, and aggressive rural marketing, boosted hinterland sales toward month-end. “Urban demand, however, remained muted due to low enquiry and restrained customer sentiment. With inventory levels steady at around 55 days, calibrated discounting, streamlined finance facilitation, and intensified urban outreach will be crucial for sustaining festive-season growth,” Vigneshwar said.
Commercial vehicles posted a modest 0.23 per cent year-on-year increase, led by urban momentum. Dealers cited new model launches, aggressive marketing support, bulk institutional orders, and timely stock availability as key drivers, alongside targeted schemes that bolstered school-bus volumes. In contrast, rural haulage demand remained fragmented amid heavy rainfall, seasonal softness in cement, coal, and construction logistics, and slower financier disbursements, prompting many buyers to defer purchases to the post-monsoon period.
The tractor segment delivered a strong performance, with volumes up 10.96 per cent. “The timely release of enhanced agricultural subsidies and favourable monsoon rains—together with strengthened rural liquidity—spurred a marked increase in purchase intent. This resilience underscores the pivotal role of policy interventions in sustaining agri-rural demand,” he said.
Source: business-standard