In March, Light Vehicle (LV) wholesales in India experienced a modest increase of 1% month-on-month (MoM), totaling 446k units. Although this represented a slight improvement, the year-on-year (YoY) growth rate was more substantial at 5%.
Passenger Vehicle (PV) sales saw a 2% MoM and 5% YoY increase to 380k units. Additionally, the total for Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6 tons reached 66k units, reflecting a 3% MoM decrease but a 7% YoY gain.
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March began with subdued demand due to the inauspicious Kharmas period. However, as the month progressed, sales volumes recovered, supported by fiscal year-end depreciation benefits and attractive incentives. Nonetheless, liquidity challenges and regional pockets of low demand, along with weaker GDP growth, had a detrimental impact.
Retail sales of PVs and LCVs in March rose by 15% MoM to 403k units, compared to 349k units in February and 522k units in January, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales increased by 16% MoM, while LCV sales grew by 15% MoM.
The early-month weakness, attributed to the Kharmas period, was counterbalanced by a surge in the final week, driven by festivals such as Navratri, Gudi Padwa, Eid, and year-end depreciation benefits, as reported by FADA.
Retail sales in the PV segment particularly benefited from discounting, impending price hikes, and festive purchasing. New model introductions and improved variant availability also contributed to growth. However, these positive factors were tempered by liquidity constraints and localized areas of weak demand, FADA noted.
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By GlobalDataConsequently, PV inventory levels increased to 50-55 days at the end of March, compared to 50-52 days in February and 50-55 days in January, according to FADA.
Meanwhile, total LV sales in Q1 2025 grew by 4% YoY to over 1.3 million units. This figure included 1.1 million PVs (+3% YoY) and 200k LCVs (+10% YoY).
At the onset of 2025, India’s economic momentum seemed to falter after some recovery in late 2024. Domestic consumption exhibited signs of deceleration, with unemployment remaining elevated, especially in urban areas.
Internationally, reduced imports and diminished global demand presented challenges. Trade policies are in flux, with import duties anticipated to rise significantly, although India maintains certain competitive advantages over regional rivals. Inflation has remained stable, supported by lower oil prices and robust crop yields.
In response, the Reserve Bank of India has relaxed monetary policy by lowering its key interest rate to 6% to bolster the recovery amidst escalating risks. This marks the second consecutive reduction since February. It is anticipated that another rate cut may occur at the next meeting in June.
Our partner, Oxford Economics (OE), has revised India’s GDP forecasts downward by 0.2 pp from 6.7% to 6.5%, mainly due to global uncertainty affecting trade and investment, prompted by US tariffs.
Nonetheless, our LV sales forecast remains largely unchanged, with only minor adjustments. We maintain our projection that sales in 2025 will exceed 5 million units for the first time in the market’s history, reaching 5.1 million units (+3% YoY). Looking ahead, we anticipate this figure to climb to 6.8 million units by 2032.
Specifically, we forecast PV sales in 2025 to rise by 3% YoY to 4.3 million units, with a 2032 outlook of 5.9 million units. Simultaneously, we project LCV sales to grow by 7% YoY to 743k units this year, with our 2032 forecast currently standing at 924k units.
This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.
