Auto retail dips 4.31% in July 2025; Tractor sales buck the trend with double-digit growth: FADA
Retail sales for two-wheelers fell sharply by 6.48% YoY and 6.28% MoM, as monsoon rains and crop-sowing activities limited rural footfalls; while tractors emerged as the standout performer, registering a 10.96% YoY and 14.9% MoM surge.
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The Federation of Automobile Dealers Associations (FADA) today released its monthly vehicle retail data for July 2025, revealing a 4.31% year-on-year (YoY) decline in overall auto retail across the country. On a month-on-month (MoM) basis, sales dropped by 1.98%.
As per the FADA data, retail sales for two-wheelers fell sharply by 6.48% YoY and 6.28% MoM, as monsoon rains and crop-sowing activities limited rural footfalls. Many buyers postponed purchases in anticipation of festive-season deals in August. However, the three-wheelers segment remained resilient with a marginal 0.83% YoY growth and a robust 10.73% MoM rise, buoyed by last-mile mobility demand.
Meanwhile, the sales for passenger vehicle declined slightly by 0.81% YoY, but rose 10.38% MoM. Rural demand picked up during the Aashaada period with support from auspicious delivery days and targeted dealership schemes. However, urban sales remained sluggish amid weak enquiries and cautious consumer sentiment. Inventory levels hovered at approximately 55 days.
C S Vigneshwar, FADA President said, “India’s auto retail sector applied the brakes in July, with overall retails declining by 4.31% YoY. This pullback largely stems from a high-base effect in July 2024, when an extreme heat wave was immediately followed by excessive rainfall, constraining volumes before a rebound later that month."
The commercial vehicles segment posted a modest 0.23% YoY uptick and a 4.19% MoM increase, driven by urban demand, institutional buying, and school bus schemes. Rural CV movement, however, was hit by erratic weather and financing challenges.
It is interesting to note that tractors emerged as the standout performer, registering a 10.96% YoY and 14.9% MoM surge, backed by enhanced agricultural subsidies and favorable rainfall patterns which boosted rural liquidity and sentiment. Contrary to this, construction equipment is the worst-hit category as sales plummeted 33.28% YoY and 59% MoM, reflecting project delays and poor site mobility due to heavy rains.
"Dealers are confident of a post-monsoon uptick, with several purchase decisions deferred to August ahead of the festive season—making strategic stock alignment and focused rural–urban engagement imperative for reviving momentum," Vigneshwar noted. He further said that the rural haulage demand remained fragmented amid heavy rainfall, seasonal softness in cement, coal and construction logistics and slower financier disbursements.
Furthermore, FADA anticipates a turnaround in August, supported by the dual boost of monsoon tailwinds and the upcoming festive fervour. However, the association has flagged potential risks from volatile export tariffs and localized flooding, urging stakeholders to adopt vigilant risk-mitigation strategies. “To convert this latent demand into retail success, OEMs and dealers must lean into precision-led promotions, forge finance partnerships, and bridge rural–urban disparities through tailored engagement,” the report advised.
