CHENNAI: India’s automobile industry witnessed a mixed trend in July 2025, with passenger vehicle (PV) sales registering modest growth, while two-wheelers remained largely flat and tractors posted a decline. The market dynamics reflected a combination of factors, including the monsoon’s uneven progress, festive season pipeline adjustments, and base effect from last year.
According to data released by the Federation of Automobile Dealers Associations (FADA), total vehicle retail sales in July 2025 rose marginally by 2.3% year-on-year (YoY) to 17.58 lakh units, compared to 17.18 lakh units sold in July 2024.
Passenger Vehicles:
The PV segment saw 3.1% YoY growth, with 3.55 lakh units sold in July 2025, up from 3.44 lakh units in July 2024. The segment benefited from improved model availability, attractive financing, and pre-festive season demand, particularly in urban markets. However, high inventory levels remained a concern for dealers, especially in the entry and mid-size car segments.
Maruti Suzuki, Hyundai, and Tata Motors retained their leadership positions, with Maruti reporting a 4.5% YoY increase in retail volumes. Meanwhile, Mahindra continued to see strong demand for its SUV lineup.
Two-Wheelers:
The two-wheeler category remained nearly stagnant, with a 0.8% YoY increase, recording 11.24 lakh units sold in July 2025 versus 11.15 lakh units in July 2024. While urban demand held steady, rural markets showed signs of weakness due to delayed rainfall and concerns over agricultural income.
Hero MotoCorp and Honda reported flat sales, while TVS Motor showed marginal improvement driven by scooter and EV sales.
Commercial Vehicles:
The commercial vehicle (CV) segment reported a 2.9% YoY rise, with 74,600 units sold compared to 72,500 units in July 2024. Demand was supported by stable freight rates, pre-festive movement of goods, and infrastructure activity. However, dealer feedback suggested caution over fleet replacement demand in the coming months.
Tractors:
Tractor sales saw a significant 8.7% YoY decline, falling to 53,200 units in July 2025 from 58,300 units a year ago. The drop was attributed to below-normal rainfall in key agrarian states and slower rural sentiment, affecting both demand and liquidity.
Electric Vehicles:
Electric vehicle sales continued to grow steadily across segments, although their overall market share remained modest. FADA noted strong interest in EV two-wheelers and three-wheelers, supported by state-level incentives and improved charging infrastructure.
Looking ahead, the auto retail industry is expected to see a build-up in demand ahead of the festive season starting in September. However, uncertainties remain around rural recovery, inventory levels, and input costs.
FADA has urged the OEMs (original equipment manufacturers) to align production closely with real demand and avoid oversupplying dealerships to maintain financial health across the value chain.