Passenger Car Sales Drop To 18-Month Low in June; Exports, SUVs Drive Growth Expectations For FY26
SIAM President Shailesh Chandra said a good monsoon could aid rural demand, and drive revival of small car sales.
Passenger vehicle sales declined 7% year-on-year in June to 3,12,849 units, according to the latest SIAM data. This marked the lowest level in the past 18 months, driven mainly by continued weakness in the small passenger car segment.
Passenger vehicle sales declined by 1.4% for the quarter. While small car sales dropped 11%, overall growth was supported by utility vehicles, which recorded a 3.8% increase during the same period.
Utility vehicles now constitute 66% of passenger vehicles sales. This clearly indicates pressure in the sub-Rs 10 lakh segment, which is leading the fall in share of these vehicles, a sentiment echoed by SIAM President, Shailesh Chandra.
He said the entry-level segment within four-wheelers remains under pressure. However, a better monsoon could aid rural demand, potentially aiding revival of small car sales, he added. Meanwhile, the segment above Rs 10 lakh continued to grow, driving higher growth in utility vehicle sales.
Among other categories, the two-wheeler space also showed weakness. Two-wheeler sales were down by 3.4% to 15,15,851 units in June. Motorcycles sales were down by 3.7%, while scooter sales slowed down by 1.7%. For quarter one, sales were down 6.2% at 46,74,562 units.
Chandra expressed optimism about a recovery in the two-wheeler segment, supported by some easing in vehicle financing. He expects improved performance in the coming quarters. With the upcoming festival season coupled with the benefits of RBI repo rate cuts, consumer sentiment is expected to improve, he said, adding the hatchback and sedan segment are likely to stabilise in terms of sales.
SIAM remains ‘cautiously optimistic’ for quarter two with the festive season typically serving as a demand driver. The same scenario panned out last year too for the auto industry. While the festive season did boost sales, there was a sharp drop post November. Apart from festive period, SIAM expects above-normal monsoon to aid rural income recovery, which is especially important for two-wheelers and entry-level vehicles.
