Indian automakers' sale of passenger vehicles to dealers dropped over 7 percent on-year to hit 3.13 lakh units in June, the lowest in nearly 18 months, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on July 15.
Two-wheeler wholesales also saw a notable decline, falling 3.4 percent to nearly 15.6 lakh units in June.
During the April-June quarter of the financial year 2026, passenger vehicle sales dropped over 1 percent on-year to 10.12 lakh units, while commercial vehicle sales dropped marginally to 2.25 lakh units. Two-wheeler sales, however, tumbled over 6 percent to 46.75 lakh units during the quarter under review.
SIAM said that fall in two-wheeler sales came as there was some inventory correction in the industry. It however noted that retail two wheeler registration increased 5 percent in Q1, driven by "marriage season and positive demand sentiment".
Three-wheelers meanwhile posted its highest ever Q1 sales of 1.65 lakh units in 2025-2026. This was driven by factors including "increased economic activity supporting transportation creating urban demand", the industry body said.
"Looking ahead to Q2, the overall industry outlook remains cautiously optimistic. While the challenges from Q1 may continue to linger in the near term, several positive macroeconomic and seasonal indicators could support a gradual recovery," SIAM added.
It noted that the upcoming festive season typically serves as a demand driver, particularly for passenger vehicles and two-wheelers, and could help uplift consumer sentiments. Additionally, an above-normal monsoon is likely to aid rural income recovery, which is especially important for two-wheelers and entry-level vehicles that rely heavily on rural demand.
The RBI's cumulative repo rate cuts of 100 basis points over the past six months are also expected to gradually ease borrowing costs which could positively impact the auto sector by improving affordability and boosting consumer sentiment in the coming months.
SIAM however noted that supply constraint risks remain, especially on the back of rare earth crisis.
(With inputs from Reuters)
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