Broad-based recovery led by 2Ws; PVs lag on weak sentiment
In June 2025, the aggregate wholesale numbers exhibited by OEMs continued to highlight resilience, with the overall volumes climbing by 10.7% YoY. The growth theme remained the same, with SUVs leading the way in PVs, 2Ws continuing their double-digit growth and robust performance on the export front. A key highlight during the month was the healthy traction witnessed in the tractor space, amidst positive farm sentiment and expectations of above normal rainfall. In a major push to enhance road safety, the Ministry of Road Transport and Highways recently announced that all new two-wheelers, scooters, and motorcycles manufactured from January 2026 onward must be equipped with Anti-lock Braking Systems (ABS), regardless of engine capacity. This might imply higher costs for models for OEMs operating primarily in the entry-level space, particularly HMCL and TVS, which derive the majority of their revenue from this segment. Additionally, Maharashtra’s new tax structure, effective July 1, 2025, will likely dampen sales volumes for high-end cars and goods carriers due to significantly increased costs, potentially causing buyers to defer purchases or seek alternatives. As we enter H2CY25, we sense that tractors and 2W will likely be the key gainers, benefitting from the improving rural sentiment and better kharif sowing period, aided by normal rainfall. Moderation in the SUV push is likely to be observed in the upcoming period due to a high base from previous years and saturation in first-time buyers. CV volumes would likely remain mixed, with buses reporting a higher growth rate compared to M&HCV and LCVs. Dampening of sentiment in the space is also expected in the short term, with the onset of monsoons and a halt in infrastructure spending.
Passenger Vehicles
PV sales in June 2025 declined both YoY and MoM, reflecting early signs of fatigue after a strong start to the year, as SUV dominance, which propelled market volumes in the previous period, showed signs of moderation. Without any support from entry-level volumes, the outlook for the segment seems bleak, with moderation in SUVs further undermining future trend. The sales numbers for June 2025 of key OEMs remained largely mixed. For MSIL, the volumes for the month remained disappointing, with a decline observed on every front, except for the Ciaz which remains on its last leg and exports which stood at an all-time high. M&M maintained its stronghold in the space, with its SUV dominant portfolio helping it to grow by high teens. Tata Motors’ market dominance remains under radar, with weaker domestic demand undermining its position. Hyundai numbers remained largely within expectations, reporting a YoY growth of 13.0%.
In the EV space, Tata Motors continued to lose market share, which is currently estimated to be 35.8%, compared to the lion’s share of 62.7% in June 2024. This disruption in the market dynamics is largely driven by the successful penetration of MG (30.3%) and Mahindra (22.9%) in the EV space, backed by their fresh portfolio and different platforms. EV penetration for the month is estimated at around 4%, underscoring the growing momentum for electrified mobility.
Two Wheelers
During the month, 2Ws maintained their strong momentum on the annual front; however, a decline was noted on a monthly basis. The annual uptick in numbers was once again supported by positive rural sentiment and improved retail demand. Export remained relatively buoyant for OEMs. HMCL’s performance was robust during the month, with exports and scooters contributing to its healthy growth, helping the OEM to retake the top position from Honda. Bajaj, on the other hand, observed weak domestic demand during the month, while expanding on the exports front. TVS exhibited mixed trends, with a YoY growth while declining on a monthly basis. A key highlight was the steep decline in its EV portfolio compared to the previous month, despite the steady retail demand reflecting in the retail sales. Royal Enfield remained strong during the month, with improving support from domestic demand, while also performing strongly on the export front, explaining the growing base of the OEM in both markets.
India’s e2W market is undergoing a significant transformation, with legacy manufacturers such as TVS and Bajaj rapidly gaining dominance. Leveraging their extensive distribution networks, these legacy players are now leading sales, while earlier EV frontrunners like Ola Electric are experiencing a decline in market share despite overall sector growth. Market dynamics remain more or less the same, with TVS topping the charts with 24.0% market share. Bajaj Auto claimed the second spot with 21.8% share and Ola came in third at 19.2%.
Commercial Vehicles
CV wholesale volumes remained weak in June, pressured by tightening liquidity and a subdued freight cycle. On the supply side, OEM dispatches were likely disrupted due to the recent AC cabin mandate, which impacted production. Meanwhile, dealers are facing challenges in clearing existing inventory. That said, stable retail demand hints at some degree of pre-buying ahead of regulatory changes. Ashok Leyland reported a modestly higher volume for the month, supported by higher traction from buses and exports, while muted truck demand limited growth. For VECV, the trend remained muted, with demand weakening across heavy vehicles and buses. For Tata Motors, domestic demand stood weak across its portfolio, while demand for exports exhibited robustness. LCV demand for M&M also remained weak, except for its 3W and mid LCV level portfolio, which highlighted robustness.
Tractors
The number for tractors remained above expectations in June 2025, with a buoyant rural demand and strong harvesting period fueling demand. M&M and Escorts both reported a teen-digit growth rate in the domestic market, while also highlighting healthy demand from international markets. The outlook for the segment remains optimistic, with a better sowing period, sustained government support and better reservoir levels supporting demand.
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