Overall automobile retail sales rose by 3% year-on-year in April, reaching 2.28 million units, up from 2.22 million units in the same month last year, according to the Federation of Automobile Dealers Associations (FADA). Every vehicle segment saw a rise in sales during the month barring commercial vehicles, which registered a slight decline.
The growth was driven by festive demand linked to occasions such as Akshay Tritiya, Bengali New Year, Baisakhi, and Vishu, coupled with improved consumer sentiment following a pause in the global tariff war that had earlier weighed on market confidence.
“With the tariff war on hold, stock markets rebounded, easing investor concerns. Customers leveraged festivals like Chaitra Navratri and Akshay Tritiya to make purchases, ending April on a positive note,” said CS Vigneshwar, president of FADA.
Among the segments, three-wheelers led with a 24.5% jump in sales, rising to 99,766 units from 80,127 units in April last year. Tractor sales followed with a 7.6% increase, reaching 60,915 units against 56,635 units a year earlier. Two-wheeler sales, the largest in volume, climbed 2.3% year-on-year to 1.69 million units from 1.65 million.
Passenger vehicle sales in April rose marginally by 1.55% to 349,939 units from 344,594 in the same period last year. FADA noted that despite limited new model introductions, the segment saw growth on account of discount-driven purchases. However, elevated inventory levels, averaging around 50 days, and weaker conversion from enquiries to actual sales indicated a cautious consumer base.
The only segment to decline was commercial vehicles, where sales dropped by 1.05% to 90,558 units, down from 91,516 in April 2024. The fall was attributed to price hikes by manufacturers amid stagnant freight rates and lower fleet utilisation. Dealers also noted that some demand had been pulled forward into March due to year-end incentives. Nonetheless, the bus segment within CVs remained strong, fuelled by institutional demand from schools and staff transport services.
While rural areas saw improved demand for two-wheelers, aided by a strong Rabi harvest, healthy reservoir levels, and favourable monsoon forecasts, urban sales were supported by new model launches. However, higher financing costs and emission norms related price increases created pockets of resistance, especially among entry-level buyers.
Looking ahead, FADA expressed cautious optimism. The association said May is expected to benefit from the tail end of the wedding season and a robust agricultural cycle, underpinned by healthy crop prices and an above-normal monsoon forecast. These factors are likely to sustain rural demand, particularly for two-wheelers and tractors.
However, rising living costs and tighter credit conditions could restrain growth in some segments. For passenger vehicles, sustained demand may be tempered by anticipation of new model launches and high borrowing costs. Commercial vehicle sales are projected to remain flat, with slow e-commerce activity and growing competition from electric three-wheelers acting as headwinds.
FADA stressed that disciplined inventory management, selective incentives, and easing financing terms will be key to maintaining sales momentum through the coming months.
