To further deepen our analysis, FADA is pleased to announce that Construction Equipment (CE) will now be reported as a separate category in our monthly auto retail insights, rather than being grouped under Commercial Vehicles (CV). Recognizing CE’s distinct market dynamics and its vital role in infrastructure growth, this change ensures stakeholders receive more precise, actionable data. Over time, FADA has continually enabled deeper insights, and by distinguishing CE, we reaffirm our commitment to providing targeted analysis—empowering OEMs, Dealers, Financiers, Regulators, and Investors to make informed, strategic decisions.
Overall, May ’25 Auto Retail Report:
Retail volumes +5.0 % YoY
Category-wise retails:
- 2W +7.3 % YoY
- 3W +6.2 % YoY
- Tractors +2.7 % YoY
- PV –3.1 % YoY
- CE –6.3 % YoY
- CV –3.7 % YoY
- PV inventory increases to ~52–53 days (FADA continues to advocate a 21-days stock norm)
Segment Highlights:
- 2W: +7.31 % YoY, –2.02 % MoM. Robust semi-urban/rural demand driven by auspicious marriage dates, strong Rabi harvest and pre-monsoon pull, financing constraints in the economy segment cap upside.
- PV: –3.1 % YoY, –13.6 % MoM. Elevated inventory days and subdued consumer sentiment—particularly in entry-level models—compounded by war related tensions for border-state (J&K, Punjab, Rajasthan, Gujarat) and margin-money challenges; healthy bookings offset by weak retail conversions.
- CV: –3.71 % YoY, –11.25 % MoM. Muted freight cycles and tight liquidity weigh on truck and passenger-carrier demand; bus sales provide limited relief, while wholesales accelerate into June ’25 A/C-cabin regulations.
Near-Term Outlook (Jun ’25):
- Monsoon forecast 106 % of LPA signals renewed rural liquidity and stronger farm incomes, supporting 2W/trac traction in semi-urban and hinterland markets.
- RBI repo-rate is widely expected to ease by 25 bp in early June, reinforcing financial conditions and reducing borrowing costs for dealers and end customers.
- Global supply-chain headwinds (rare-earth constraints in EV components, geopolitical tensions) may limit urban consumer sentiment and exert cost pressure.
- 2W momentum to be sustained by festival pull-through (Rath Yatra) and agri-led cash flows; financing constraints and selective OEM price adjustments will remain headwinds.
- PV channels to contend with elevated inventory, legacy product portfolios, and tepid retail conversions despite micro-market Rath Yatra upticks.
- CV dealers must manage inventory churn—driven by pre-regulation A/C-cabin conversions—while freight demand (coal, cement, mining) remains subdued.
- Production planning, calibrated channel incentives, and working-capital support are critical to navigate this lean but resilient month.