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India Auto Sales Surge Despite Price Hikes
8 Jun
Summary
- Passenger vehicle sales rose 23.25% in May, boosting overall auto market growth.
- Rural India fueled significant growth, outpacing urban markets for passenger vehicles.
- Electric and CNG vehicle adoption crossed 11% penetration for the first time.
Overall auto retail sales in India saw a robust 9.55% increase, reaching 2.53 million units in May, defying challenges like fuel price hikes and heatwaves. Passenger vehicle sales were a key driver, surging 23.25% year-on-year to 402,591 units.
This significant growth in passenger vehicles was predominantly fueled by rural demand, which jumped 30.35%, considerably outperforming urban market growth of 18.8%. This trend indicates strengthening rural consumption and improving farm incomes.
A notable shift towards alternative fuel technologies occurred, with overall EV penetration across all vehicle categories surpassing 11% for the first time. This rise is attributed to fuel price increases and a broader selection of eco-friendly vehicles.
Two-wheeler sales, the largest segment, grew 7.54% to 1.84 million units, with urban markets showing stronger growth than rural areas. Commercial vehicle sales also increased by 5.29%, led by light commercial vehicles and tractor sales, though wheeled construction equipment sales declined.
Dealer sentiment remains positive, with expectations of continued growth into the festive season, buoyed by strong booking backlogs.
