Auto Sales Cool Off in July 2025 — Festive Season May Fuel Recovery, FADA Hopes- is this given news headline is correct

Vehicle retail sales across India dropped in July 2025, with overall registrations falling by 4.31% compared to the same month last year. The data was shared on Thursday by the Federation of Automobile Dealers Associations (FADA), which pointed to last year’s unusually high numbers and other seasonal issues as the main reasons behind the decline.

FADA explained that in July 2024, vehicle sales had picked up later in the month after a long period of extreme heat followed by heavy rainfall. This led to a strong base, making this year’s numbers look weaker in comparison.

FADA President C S Vigneshwar said, “The fall in July is mostly because of the high base from last year. Sales bounced back strongly then, which wasn’t the case this time due to different weather patterns.”

Two-Wheelers See Major Dip

When looking at different types of vehicles, the two-wheeler segment faced the biggest decline. Sales dropped 6.48% year-on-year and 6.28% compared to June 2025. The continuous rains and farming-related work, especially in rural areas, kept people from visiting showrooms, which affected two-wheeler purchases.

Passenger vehicles also declined slightly, with a 0.81% drop compared to last July. However, on a month-on-month basis, sales improved by 10.38%. Still, stock levels in showrooms remained high, with around 55 days of inventory recorded.

In contrast, the commercial vehicle segment showed a small improvement. There was a 0.23% increase from last year and a 4.19% rise compared to the previous month.

Tractor Sales Lead the Market

Among all segments, tractors performed the best. Tractor sales grew 10.96% compared to July last year and increased by 14.9% from June 2025. This strong performance was likely supported by farming activities during the monsoon season.

Looking at the bigger picture, FADA remains hopeful about August. The presence of multiple festivals such as Raksha Bandhan, Janmashtami, Independence Day, and Ganesh Chaturthi is expected to lift customer interest and boost footfall at dealerships. Monsoon benefits could also support this recovery.

A recent survey by FADA revealed that 59% of auto dealers are expecting better sales in August, while only 9% fear a drop. The remaining dealers expect stable numbers.

Cautious Outlook for August

Despite the positive outlook, FADA warned that certain global and economic challenges could affect consumer behavior. The recent 25% tariff by the United States on Indian exports, the weakening of the Indian rupee, and higher import costs could hurt confidence and reduce non-essential purchases.

FADA President Vigneshwar commented, “We are hopeful as we enter August. The festive season and good rainfall are in our favor, but we need to keep an eye on global trade changes and unpredictable weather in some parts.”

Even though July saw a slowdown, the total retail sales from April to July in the current financial year (FY26) showed a growth of 2.79% year-on-year. In these four months, a total of 85.24 lakh vehicles were registered. During the same period, three-wheeler and passenger vehicle sales grew by 8.62% and 2.46%, respectively. Tractor sales also went up by 7.67%, showing steady performance in the agriculture-linked segment.