India auto retail sales jump 21.8% in best-ever June as EV adoption accelerates: FADA

India's automobile retail sales rose 21.8% year-on-year in June, marking the strongest June on record amid a growing shift towards electric and alternative-fuel vehicles, dealer body Federation of Automobile Dealers Associations (FADA) said on Monday.

Overall vehicle registrations stood at 25,57,234 units in June, up from 20,98,996 units in the same month last year. On a month-on-month basis, retail sales rose 1.03%.

FADA said June was the best-ever month for retail registrations across two-wheelers, passenger vehicles, commercial vehicles and three-wheelers.

Passenger vehicle retail sales led the growth, rising 28.6% to 410,853 units, while two-wheeler sales increased 21.2% to 1.83 million units.

Commercial vehicle sales gained 16.9%, three-wheeler sales rose 16.2% and tractor registrations climbed 25.3%.

Wheeled construction equipment sales, however, fell 40.9% from a year earlier.

The share of alternative-fuel passenger vehicles, including compressed natural gas (CNG), hybrids and electric vehicles, crossed 40% for the first time, reaching 40.35% of total passenger vehicle registrations.

CNG vehicles accounted for 24.33%, hybrids 8.27% and EVs 7.75%.

Electric two-wheelers accounted for 10.6% of two-wheeler retail sales as it entered double-digit market share for the first time.

Total EV retail registrations across all categories hit a record 306,220 units during the month.

FADA, however, said passenger vehicle inventory at dealerships increased to 32-34 days from the end of May, remaining well above its recommended benchmark of 21 days.

The dealers' body urged passenger vehicle manufacturers to calibrate dispatches during the monsoon period to prevent dealer capital from being locked in unsold inventory.

According to FADA, rural demand showed some sequential weakness due to the delayed and uneven progress of the southwest monsoon, although year-on-year growth in rural markets remained stronger than urban regions.

Rural passenger vehicle sales rose 35.1% year-on-year compared with 24.7% growth in urban areas.

FADA said 51.2% of dealers expect sales growth in July, supported by improving monsoon conditions, kharif sowing and normalised supplies, while 66.2% expect growth over the July-September period ahead of the festive season. However, it identified a possible monsoon shortfall and its impact on rural demand as the biggest risk.