Steady Rise in India's Automobile Sales Amid Economic Challenges

India's automobile retail sales experienced a 5% year-on-year increase in June, recording growth across passenger vehicles, two-wheelers, and commercial vehicles, according to the Federation of Automotive Dealers Associations (FADA).

Despite facing obstacles such as heavy rains and constrained market liquidity, the sector benefited from strong incentive schemes and fresh bookings. Dealers also reported compulsory billing procedures imposed by some manufacturers to meet volume targets, resulting in notable inventory buildup.

FADA remains cautiously optimistic, highlighting the potential support from robust rural demand and government capital expenditure. However, challenges persist, including evolving geopolitical tensions, rare-earth material shortages, and logistics issues related to monsoon disruptions.

(With inputs from agencies.)