India's auto industry saw robust growth in June, with a significant shift in consumer preference towards vehicles powered by alternative fuels, according to industry data. The President of the Federation of Automobile Dealers Associations (FADA) noted that the conflict in Iran, which drove up fuel prices, has accelerated demand for battery electric, hybrid, and compressed natural gas vehicles, pushing their combined share of passenger vehicle sales to a new all-time high.

With multiple increases in petrol and diesel prices during May, consumers are increasingly opting for models with lower running costs. In June, retail sales of passenger vehicles using alternative fuels accounted for 40.35% of the total, up from approximately 38% in the previous month.

FADA President C.S. Vigneshwar stated on Monday, "We need to continue observing whether this is a short-term, price-driven impulse from consumers or if this category can sustain long-term growth."

Overall vehicle retail sales rose by 21.8% year-on-year to reach 2.6 million units, setting a new record. Within this total, passenger vehicle sales surged 28.6% compared to the same period last year, reaching 410,853 units.

Breaking down the passenger vehicle segment, compressed natural gas models constituted 24.3% of total sales, hybrid vehicles accounted for 8.3%, and battery electric vehicles made up 7.8%.

Industry leader Maruti Suzuki reported last month that orders for its CNG models jumped by 40% following the fuel price hikes.

Association data also showed that electric two-wheelers' share of total two-wheeler sales climbed to 10.6%, crossing the double-digit threshold for the first time.

Vigneshwar further commented that although the most severe phase of crude oil price volatility and supply chain disruptions stemming from the Iran conflict appears to have passed, it could still take "several quarters" for the market to fully normalize, during which time automakers may face cost pressures.