In March, India's light vehicle (LV) wholesale experienced a modest growth of 1% per month (mom), totaling 446,000 units. Although this improved slightly, the year-on-year growth rate (about 5%) was higher.

Passenger car (PV) sales reached 2%, up 5% year-on-year to 380k units. In addition, the total vehicle weight of light commercial vehicles (LCVs) was 6 tons, reaching 66K units, reflecting a 3% decrease in mom but a 7% increase over the previous year.

The parade began with demand due to the unlucky Kalmas period. However, as the month progresses, sales are recovered and supported by end-of-first fiscal year depreciation benefits and attractive incentives. Nevertheless, the liquidity challenges of low demand and the effects of regional pockets and weak GDP growth have adverse effects.

Retail sales of PVS and LCV rose 15% to 403K units in March, while retail prices in January were 403K units, with retail sales increased by 349K units and 522K units in January, according to the Federation of Automobile Dealers Associations (FADA). PV retail sales increased by 16% MOM, while LCV sales increased by 15%.

The weaknesses attributed to the Kalmas era were offset by the last week's surge reported by FADA and the last week's surge.

Retail sales in the photovoltaic sector benefit particularly from discounts, upcoming price increases and holiday purchases. New model introductions and improved variant availability also contribute to growth. However, these positive factors are alleviated by local regional ease restrictions and weak demand.

Therefore, as of the end of February, PV inventory levels rose to 50-55 days at the end of March, while 50-52 days in February and 50-55 days in January.

Meanwhile, LV sales in Q1 2025 increased by 4% to 1.3 million units in Q1 2025. This figure includes 1.1 million PVS (+3% YoY) and 200K LCV (+10% YoY).

At the beginning of 2025, India's economic momentum seemed to be staggering after it recovered by the end of 2024. Domestic consumption shows signs of slowing down, and unemployment is still rising, especially in urban areas.

Internationally, reducing imports and reducing global demand present challenges. Trade policy is in a changing state, and import taxes are expected to rise significantly, although India maintains some competitive advantages in terms of regional competitors. Inflation has remained stable and supported lower oil prices and stable crop yields.

In response, the Reserve Bank of India relaxed monetary policy by reducing its key interest rate to 6% to strengthen the recovery rate of risk escalation. This marks the second decline since February. Another tax reduction is expected at the next meeting in June.