Passenger vehicle (PV) sales declined sharply in June as consumers, particularly small car buyers, remained hesitant about making big-ticket purchases.
India’s largest carmaker, Maruti Suzuki (MSIL), reported a 13% year-on-year drop in total PV dispatches, selling 118,906 units in June 2025 compared to 137,160 units in the same month last year.
Rahul Bharti, Senior Executive Officer, Corporate Affairs at Maruti Suzuki said that the slowdown in PV sales is largely due to a sharp decline in the smaller segment cars. He stated that historically, PV sales used to grow at 1.5 times the GDP growth but now even after 6.5% GDP growth, the car market is nearly flattish.
“This is because the once mass small car segment is not participating in the growth at all. This is clearly an affordability issue. Since 2019, entry-level price point in the industry has jumped by over 70%, largely driven by stricter regulations and the sales of smaller cars have fallen by over 70%,” said Bharti.
Hyundai Motor India (HMIL) and Tata Motors also reported a sharp decline in dispatches, reflecting a cyclical downturn and subdued market demand. HMIL’s dispatches declined 12% to 44,024 units in June 2025 as compared with 50,103 units in the year-ago period. "In the domestic market, the geopolitical situation continued to affect the market sentiment," Tarun Garg, Whole-time Director and Chief Operating Officer, HMIL said in a statement.
He added that as they come closer to the beginning of production at the Talegaon plant, HMIL remains cautiously optimistic about a gradual recovery of demand, supported by a reduction in repo rates and improving liquidity on account of a cut in CRR.
While some industry experts believe that lower interest rates, declining inflation, and revised income tax slabs could boost demand, persistent affordability concerns, especially in the hatchback segment among the first-time buyers, continue to dampen car sales.
Tata Motors had another dismal month. It reported 15% decline in June sales to 37,083 units in June 2025. As per reports, this is Tata Motors’ lowest monthly sales number in more than 3 years.
Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles said that in Q1 of FY26, the PV industry experienced volume pressures, particularly in May and June, with flat growth reflecting continued softness in demand.
Mahindra & Mahindra (M&M) and Toyota Kirloskar Motor (TKM) again remain outliers, thanks to strong demand for their utility vehicles. Mahindra, while retaining the second spot in the Indian car market, sold 47,306 vehicles in the domestic market, a growth of 18% and overall, 48,329 vehicles, including exports. TKM said that its total sales surged 5% to 28,869 units, including 6,453 units sold in the domestic market and 2,416 units exported.