SIAM: Car Sales Dip In May 2025 - Will RBI Rate Cuts And Monsoon Boost Auto Demand?

As per the data shared by Society of Indian Automobile Manufacturers (SIAM), total Passenger Vehicle (PV) sales went down by 0.8% at 3,44,656 units in May owing to a higher base effect last year. The total number of PVs sold during May last year stood at 3,47,492 units. 

Industry experts noted that “elevated dealer inventories” have weighed heavily on vehicle dispatches as PV retail sales in May saw a decline of 3.1% year-on-year and 13.6% compared to the previous month. Earlier this month, the Federation of Automobile Dealers Associations (FADA) flagged that PV inventory levels had risen to 52–53 days.

“High inventory, muted buyer sentiment—especially in entry-level segments—along with geopolitical tensions in border states like Jammu & Kashmir, Punjab, Rajasthan, and Gujarat, and financing hurdles such as margin money constraints, are impacting sales. Despite robust booking levels, retail conversions remain weak,” said FADA in its statement.

That said, the outlook for PV sales remains optimistic, buoyed by expectations of interest rate cuts from the RBI and forecasts of an “above-average monsoon”.

Two-wheelers up, three-wheelers down

Two-wheeler dispatches from manufacturers to dealers were up 2.2 per cent at units 16,55,927 in May as against 16,20,084 units the same month a year ago. Total three-wheeler sales in the domestic market were down 3.3 per cent at 53,942 units last month as compared to 55,763 units, SIAM data showed. 

Also Read: Car Buyers Slam The Brakes: PV Sales Dip 3.1% in May 2025, Says FADA | Republic World

According to Rajesh Menon, Director General, SIAM, all vehicle segments posted stable performance in May 2025. Passenger Vehicles segment posted sales of 3.45 Lakh units, though 2nd highest ever of May, the segment de-grew marginally by (-) 0.8% compared to May 2024, three-Wheelers de-grew by (-) 3.3% compared to May of previous year, with sales of 0.54 lakh units, while two-wheeler segment grew by 2.2% in May 2025, as compared to May 2024, with sales of 16.56 Lakh units. 

Total vehicle wholesales across categories were up 1.8 per cent at 20,12,969 units as against 19,76,674 units in May last year, SIAM said.

“Going forward, the RBI’s three repo rate cuts totalling 100 basis points in less than six months, along with a forecast of above-normal monsoons are some of the indicators which should positively impact the Auto sector by improving affordability and boosting consumer sentiment in the coming months,” noted Menon.