The period also coincided with the ethanol issue gathering attention. India’s ethanol debate is rooted in the government’s ambitious E20 programme, which mandates a 20 per cent ethanol blend in petrol. While the policy has helped cut crude oil imports and lower emissions, it has also drawn criticism over reduced fuel efficiency, the risk of engine damage in older vehicles, and concerns about food security arising from the diversion of crops towards ethanol production.

Passenger vehicles emerged as the biggest growth driver, with retail sales jumping 28.6 per cent to an all-time June high of 4,11,000 units. A notable shift within the segment was the rise of cleaner powertrains, with CNG, hybrid and electric vehicles together accounting for more than 40 per cent of passenger vehicle retail sales for the first time.

Two-wheelers, the largest segment in India’s auto market, also recorded their highest-ever June sales at 1.83 million units, up 21.2 per cent from a year earlier. Although volumes dipped slightly from May, the decline was attributed mainly to softer rural demand amid delayed monsoon rains, while urban demand remained resilient.

Three-wheeler sales climbed to a record 1,21,000 units, with the segment’s transition towards electric mobility continuing at a rapid pace. Commercial vehicle sales rose 16.9 per cent year-on-year to 90,972 units, supported by freight movement, e-commerce demand and improving supplies. Electric commercial vehicles reached a record market share of 3.5 per cent.

Tractor sales, a key indicator of rural demand, increased 25.3 per cent to 1,01,000 units, making it the second-best June on record as farmers stepped up purchases ahead of the Kharif sowing season.

FADA president C S Vigneshwar said the June numbers reflected resilient demand across both urban and rural markets, even though the delayed and uneven southwest monsoon had led to some moderation in rural buying on a month-on-month basis.