CV Sales Slip; FADA Sees Some Tailwind In May After Flat April Overall

India’s retail commercial vehicle sales slipped in April, in a sign that growth headwinds may be lingering in the new financial year. Sales of commercial vehicles fell 1% year-on-year and 4% month-on-month during April, according to figures released by the Federation of Automobile Dealers Associations.

In 2024-25, CV sales had fallen 0.2%. 

FADA, however, was cautiously positive for May 2025, driven by a strong agricultural finish and festive sentiment in rural markets. The association flagged robust mandi procurement and firm crop prices as key near-term tailwinds, bolstering dealer optimism across semi-urban and rural belts.

“May’s agricultural cycle is concluding on a strong note,” said FADA, emphasising that rural buoyancy could offset soft consumer sentiment in urban pockets. Yet, the mood remains tempered. Kantar’s Rural Barometer and GroupM data reveal that household consumption is beginning to outpace income growth, pointing to growing pressure on discretionary spending. As a result, FADA warned that heightened consumer selectivity could impact big-ticket purchases.

Meanwhile, the Reserve Bank of India’s recent bond purchases are set to inject surplus liquidity into the banking system, paving the way for lower lending rates and enhanced auto-loan affordability. This could provide an added boost to vehicle financing, particularly in price-sensitive rural and entry-level urban segments.

In April, total vehicle sales rose 3% year-on-year. This was driven by a 2.25% rise in sales of two-wheelers, buoyed by rural demand post-Rabi harvest, with strong crop yields and an encouraging monsoon outlook fuelling buying. Three-wheelers surged 24.5%, showing resilience in intra-city transport and last-mile delivery. Tractor sales grew 7.5%, reinforcing the rural strength narrative. Passenger vehicles edged up 1.5%, as sustained SUV demand was offset by weak sales in the entry-level segment.

FADA President C.S. Vigneshwar attributed the April uptick to a combination of paused tariff tensions and a sharp stock market recovery, which improved consumer sentiment. He also credited seasonal festivals such as Chaitra Navratri, Akshay Tritiya, Baisakhi, and Vishu for driving footfall and purchases.

The association expects the auto retail sector to maintain momentum—though the performance of CVs and inflation’s effect on rural demand remain critical watchpoints. Lower lending rates, aided by central bank action, could tip the scales in favour of stronger sales in the months ahead.