The Indian auto industry saw its best-ever May retail sales at 25,31,067 units during the month, a 9.55 per cent year-on-year expansion -- with passenger vehicles (PVs) witnessing a robust 23.25 per cent growth, the Federation of Automobile Dealers Associations (FADA) data showed on Monday.

Two-wheelers saw 7.54 per cent retail growth, with commercial vehicles at 5.29 per cent and three-wheelers at 3.56 per cent.

The strong May performance was achieved despite an above-normal heatwave, fuel-price pressure and the evolving West Asia situation, said FADA.

“However, the sequential softness of 6.75 per cent reflects the customary post-April seasonal moderation and a delayed south-west monsoon, keeping May largely a pre-sowing month across much of rain-fed Bharat. That growth held through this confluence of pressures underlines the resilience of the underlying demand,” said FADA President C.S. Vigneshwar..

Two-wheeler retails stood at 18,44,947 units in May, up 7.54 per cent YoY, with urban markets growing 11.75 per cent and rural markets 4.74 per cent YoY.

A notable feature of the month was the consumer response to the May fuel-price revision: dealers reported a visible rise in enquiries for fuel-efficient and alternative-powertrain options, reflected in the 2W EV share climbing to 9.25 per cent from 6.11 per cent a year ago.

Passenger vehicle retails were the clear standout at 4,02,591 units, a robust 23.25 per cent expansion. Rural PV grew 30.35 per cent YoY against urban at 18.80 per cent.

Dealers pointed to a small-car revival co-existing with a sustained SUV mix, healthy booking pipelines and refreshed product launches, alongside a richer alternative-powertrain mix, in which CNG share rose to 23.34 per cent and EV share improved to 6.63 per cent.

Overall alternative fuel share rose to over 38 per cent in May, said Vigneshwar.

Commercial vehicle retails came in at 83,823 units, a 5.29 per cent YoY growth, with rural markets at over 8.10 per cent growth, outpacing urban at over 2.62 per cent — a reminder that goods-movement demand is broadening well beyond the metros.

Looking ahead to June, dealer sentiment is measured, with 50.52 per cent of them expecting growth, 39.90 per cent anticipating a flat market and only 9.59 per cent foreseeing a decline, said the report. Looking at the June-July-August period, dealer confidence firms up, with 59.07 per cent of dealers now expecting growth.