Automobile retail sales increased 9 per cent year-on-year in June quarter FY25 with all segments, barring tractors, reporting growth, dealers’ body FADA said on Monday.

Overall retail sales rose to 61,91,225 units in the April-June period from 56,59,060 units in the same quarter of FY24.

Passenger vehicle retails increased 2.53 per cent to 9,20,047 units as against 8,97,361 units a year ago.

“Despite strong bookings and customer flow, high competition, excess supply and discounting presented challenges for sustained growth in the PV segment,” FADA President Manish Raj Singhania said in a statement.

Dealers reported significant impacts from elections, extreme heat and market liquidity issues, he noted.

The extreme heat led to 18 per cent drop in showroom walk-ins in May, with inventory levels reaching an all-time high of 62-67 days by the end of June, Singhania said.

“Despite improved product availability and substantial discounts aimed at stimulating demand, market sentiment remains subdued due to the extreme heat and delayed monsoons, resulting in 15 per cent fewer walk-ins,” he added.

Two-wheeler retails stood at 45,54,255 units in April-June, up 12.56 per cent as compared with 40,46,169 units in the year-ago period.

“The recovery in the two-wheeler segment is promising, largely due to the emerging performance in rural areas, although these are early trends,” Singhania said.

The segment also faced significant challenges from extreme heat and the election period, resulting in 13 per cent reduction in walk-ins in the showrooms during May and June, he stated.

Three-wheeler sales rose 11.36 per cent to 2,72,691 units in the first quarter from 2,44,878 units in the same period last fiscal.

Commercial vehicle retail sales witnessed marginal increase at 2,46,513 units as against 2,44,834 units earlier.

“Commercial vehicle segment experienced a slowdown due to the elections and a pause in infrastructure projects. In April, elections dampened sentiment, causing delays in expansion plans. Additionally, limited financing options and regional challenges, such as water scarcity, further impacted performance,” Singhania said.

Tractor retail sales declined 12.44 per cent to 1,97,719 units from 2,25,818 units a year ago.