Passenger vehicle despatches in reverse gear for 3rd straight month in July

Right ahead of the festival season, passenger vehicle (PV) despatches remained in the slow lane in July, slipping 0.2 per cent year-on-year (Y-o-Y) to 340,772 units as dealership inventory stayed high, prompting manufacturers to moderate vehicle despatches. This is the third consecutive month that PV despatches have declined. 

PV production in July was nearly unchanged at 398,071 units (up 0.1 per cent), indicating that original equipment manufacturer despatches are being calibrated to retail demand. Within PVs, passenger car wholesales fell 0.5 per cent, while utility vehicles grew by a modest 2.4 per cent. 

PV retail sales dropped 0.8 per cent Y-o-Y in July, and the Federation of Automobile Dealers Associations (Fada) said urban demand remained muted due to low enquiries and subdued customer sentiment; inventory levels continue at about 55 days.

PV despatches have been under pressure since the start of this financial year (2025-26). 

After rising 5.5 per cent in April, they fell in the next two months — down 0.8 per cent in May and 6.3 per cent in June. For April–July, PV despatches were down 0.7 per cent. 

India’s largest PV maker, Maruti Suzuki India (MSIL), saw flat despatches in July at 137,776 units, according to data from the Society of Indian Automobile Manufacturers (Siam). Speaking to reporters earlier this month, Partho Banerjee, senior executive officer for marketing and sales at MSIL, said they were upbeat about the upcoming festival season, with Onam in Kerala and Ganesh Chaturthi in September likely to lift demand. 

“Bookings in Kerala are already up 10 per cent in July, which is a strong festival indicator. A good monsoon and potential minimum support price hikes are also expected to support rural sentiment and push sales,” he had said. 

Rajesh Menon, director-general of Siam, echoed this view: “With the festival season beginning with Onam in late August, the Indian automotive industry remains cautiously optimistic that demand will gather pace in the coming months.” 

The first hints are showing: retail PV sales grew 10.8 per cent in July compared to June. 

Fada said monsoon tailwinds and festival enthusiasm should drive demand in August. Precision promotions, partnership-led finance solutions, and targeted rural–urban outreach will be critical to turning latent demand into sustained retail growth, it said. 

Industry insiders said that rural growth has slowed from 10 per cent last year to 2–3 per cent, while urban demand shows improved bookings but deferred deliveries amid information technology job concerns, artificial intelligence-related uncertainties, and geopolitical risks. 

Analysts pointed out that, based on their channel checks, buyer footfall and enquiries have dropped in recent months, partly due to job market jitters, with people taking longer to finalise purchases. 

PV exports, meanwhile, stayed firm, rising 8.7 per cent in July. The base, however, remains low at 67,292 units. 

Two-wheeler and three-wheeler despatches climbed in July by 8.7 per cent and 17.5 per cent, respectively. Within two-wheelers, scooters grew in double digits (16.2 per cent), while motorcycles were up 4.7 per cent. Among three-wheelers, passenger carriers rose 21.4 per cent, while goods carriers grew 10.6 per cent. 

Electric rickshaw despatches, however, dropped 53 per cent.