India car sales grew strongly in April, according to the Federation of Automobile Dealers Associations. However, rising tensions in the Middle East may affect sales in the coming months.Â
Passenger vehicle sales increased by 12.2% compared to last year, reaching 407,355 units. This is the highest ever for April. The growth was supported by lower interest rates announced last September, easier loan options, and strong demand from small towns and rural areas.
Overall vehicle sales also rose by 12.9% to 2.6 million units, another record for April. Most vehicle segments saw their highest-ever sales during the month. Even though sales were strong, dealers are a bit worried about the future. Problems in the Middle East could lead to higher oil prices, which may increase fuel costs and reduce demand. Dealers also mentioned risks from extreme heat and possible supply issues.
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Fuel prices in India have mostly stayed the same for regular customers, although some increases were seen in industrial gas and jet fuel for foreign airlines. Rural car sales grew much faster than urban sales, rising 20.4% compared to 7.1% in cities. Dealers said inventory levels are normal right now, but advised companies to send fewer vehicles, as demand usually slows down in May and June.
