A recent report by the Federation of Automobile Dealers Associations (FADA) said the Automobile retail sales in India grew 0.73 per cent year-on-year (Y-o-Y) in June as heatwaves deterred customers from purchases despite substantial discounts.

The two-wheeler and three-wheeler segments grew 4.66 per cent and 5.1 per cent , while the other categories such as passenger vehicles, tractors, and commercial vehicles declined 6.7 per cent , 28.3 per cent , and 4.7 per cent respectively.

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Inventory levels in passenger vehicles in June reached an all-time high, ranging from 62 to 67 days, the report said

In the two-wheeler category in June, month-on-month sales declined 10.36 per cent and grew 4.66 per cent Y-o-Y.

The Fada report said the extreme heat resulted in 13 per cent fewer walk-ins at dealer showrooms. Delayed monsoon rains and election-related market slowdowns affected rural sales, which fell from 59.8 per cent in May to 58.6 per cent in June.

Manish Raj Singhania, president of FADA said, “June is traditionally one of the weakest months for India’s auto retail. This year, while the monsoon progressed normally up to Maharashtra, it lost momentum, delaying rains in West Bengal, Bihar, Uttar Pradesh, Chhattisgarh, and Madhya Pradesh.”

“This exacerbated the effects of a severe heat wave in northwest India, contributing to a prolonged hiatus that not only intensified the heatwave but also delayed the sowing operations of kharif (summer sown) crops in northern and north-western regions, thereby impacting rural sales,” he added.

Further, the sales of Passenger vehicles declined by 6.77 per cent Y-o-Y and 7.18 per cent month-on-month.

FADA President said, “Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to extreme heat resulting in 15 per cent fewer walk-ins and delayed monsoons. Dealer feedback highlights challenges such as low customer inquiries and postponed purchase decisions.”

The commercial vehicle category also experienced a downturn, with sales decreasing by 4.74 per cent Y-o-Y and 12.42 per cent month-on-month.

June presented various challenges, including delayed monsoons, poor market sentiment, and postponed purchases due to low demand and funding delays. The industry continues to face de-growth, impacted by high temperatures affecting the agricultural sector and infrastructural project slowdowns.