In May, India’s Light Vehicle (LV) wholesale figures experienced a 1% month-on-month (MoM) decrease, totaling 399k units, although they displayed a marginal year-on-year (YoY) growth of 1%.
Passenger Vehicle (PV) sales contracted by 1% MoM to 341k units, maintaining the same level as in May 2024. Moreover, sales of Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6T stood at 58k units, marking a decline of 2% MoM but an increase of 8% YoY.
Retail sales of PVs and LCVs in May plummeted by 13% MoM to 347k units, in contrast to 397k units in April and 403k units in March, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales tumbled by 14% MoM, while LCV sales fell by 5% MoM.
PV volumes continued to suffer due to the entry-level segment, attributable to limited financing options and waning consumer confidence.
“Although bookings remained fairly healthy, retail conversions lagged on margin-money challenges and deferred decisions,” stated FADA President C S Vigneshwar.
Additionally, escalating tensions at India’s borders further exacerbated the industry’s challenges.
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By GlobalDataAs a result, PV inventory in India increased marginally to a 52-53 days’ supply at the end of May, compared to a 50-days’ supply in April and 50-55 days in March, as reported by FADA.
Cumulatively across the first five months of 2025 as a whole, LV sales rose by 3% YoY to 2.1 milliom units. This total included 1.8 milliom PVs (+3% YoY) and 300k LCVs (+1% YoY).
In June, the Reserve Bank of India reduced interest rates by 0.5 pp to 5.5%, marking the lowest rate in three years. This latest decrease follows two previous cuts in February and April.
Nonetheless, vehicle sales in June are likely to have been affected by the continued downturn in the Small Car segment as well as geopolitical tensions.
Regarding the economy, our partner, Oxford Economics (OE), has slightly revised India’s GDP growth forecast downward by 0.1 pp to 6.4% for 2025 and 6.5% for 2026, citing persistent effects from global trade tensions and policy uncertainties.
Despite a hiatus in US-China tariffs, trade policy uncertainty continues to suppress investment confidence domestically, with business surveys signaling a decline in production and capacity utilization expectations.
Meanwhile, tensions with Pakistan have temporarily eased, stabilizing the rupee and mitigating immediate risks to investor confidence.
Inflation remained in check at 3.2% YoY in May, bolstered by lower food prices and a favorable monsoon forecast, while core inflation suggests increasing demand pressures.
Our LV sales forecasts for India remain largely unchanged from previous projections, with volumes in 2025 expected to grow by 3% YoY, surpassing the 5 milliom unit threshold.
Looking ahead, we anticipate that sales will climb to 6.8 million units by 2032.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
