The India-Pakistan conflict dampened car sales in May as industry dispatches stood at about 3.52 lakh units, remaining at a similar level compared to the same month last year. Vahan data shows that vehicle registration plummeted 4% in May.
India’s largest carmaker, Maruti Suzuki (MSIL), said that the conflict impacted their sales last month as it enjoys a market share of around 55% in states like Jammu & Kashmir, Punjab, Rajasthan and Gujarat.
“The states contribute close to 22% of our sales, and the cities which were impacted account for almost 9% of our sales,” said MSIL Senior Executive Officer (Marketing & Sales) Partho Banerjee on Monday. MSIL’s domestic PV wholesales fell 6% in May 2025 to 135,962 units compared to 1,44,002 units in the year-ago month.
Not only Maruti Suzuki, but other carmakers also registered a dip in retail sales across the border states as tensions between the two nations peaked after India carried out Operation Sindoor to avenge the terrorist attack in Pahalgam.
MSIL also cited weakening demand for entry-level cars as a key factor behind the decline in overall sales volume. “Fundamentally, the cost of the vehicles is going up as the number of regulations is getting added, and that is an affordability issue, which we all have been talking about. Until the time the small car markets don't start growing, people don't upgrade from a two-wheeler to a four-wheeler. I think this problem will be there,” said Banerjee.
Amid the slowdown, automakers are adjusting production to prevent inventory buildup at dealerships.
Hyundai Motor reported an 11% decline in May 2025 to 43,861 units compared to 49,151 units in the year-ago month. "May is a month of our routine week-long biannual maintenance shutdown at our Chennai manufacturing facility, which affects the availability of a few critical models," said Tarun Garg, Whole-time Director and Chief Operating Officer at HMIL.
On Sunday, Tata Motors reported an 11% year-on-year drop in PV sales to 42,040 units in May. However, SUV major Mahindra & Mahindra (M&M) bucked the slowdown trend again in May. Its PV dispatches rose to 52,431 vehicles last month, a growth of 21% year-on-year.
"Thanks to continued demand for our products, we were able to deliver industry-leading growth across our ICE and BEV portfolio," M&M CEO Automotive Division Nalinikanth Gollagunta said. Kia India and Toyota Kirloskar also reported a double-digit growth in May sales.