Trend largely positive; Destocking drives moderation
The monthly wholesale performance of auto OEMs in July 2025 indicated a largely positive trend on an annual basis. The monthly growth highlighted signs of moderation, with some segments (particularly tractors) facing declines post the seasonally strong June, suggesting dealer-level de-stocking (primarily in tractors and entry-level 2W) and clearance of older models in anticipation of the upcoming festive season. As we advance, the outlook remains cautiously optimistic, with the industry poised for moderate volume growth, aided by the onset of the festive period, recovery in urban demand sentiments, a healthy rural economy, and new product launches. However, specific structural headwinds, such as component shortages and inventory overhangs, are likely to temper overall momentum. The month of July was also marked by a potent mix of high-stake acquisitions, ambitious EV plans, and shifting global dynamics. Tata Motors led the headlines with its landmark €3.8 billion acquisition of Italy’s Iveco Group, expanding its CV portfolio geographically. Meanwhile, M&M reaffirmed its mid-to-high teens growth guidance for FY26 and confirmed the launch of two new electric SUVs in Q1 2026, along with refreshed ICE models. M&M also finalised its acquisition of SML Isuzu, renaming it SML Mahindra, further expanding its presence in the intermediate and light commercial vehicle space. MSIL expressed its plans to launch two new SUVs (1 ICE and 1 EV) in FY26. TVS also announced the launch of a new e-2&3W before the year ends and unveiled a distinct retail strategy for Norton Motorcycles and premium TVS models.
Passenger Vehicles
PV wholesales grew modestly by 1.5% YoY in July 2025, supported by a strong MoM recovery (up 11.7%), suggesting dealer-level restocking and improved channel movement post a soft June. This stands in contrast with the elevated inventory challenges (55 days as of the end of June 2025) expressed by FADA, with PV OEMs having introduced compulsory billing procedures. For MSIL, the month remained flat on an annual basis, marked by lower traction in UVs and models like Alto and S-Presso. Export continued to be the key growth factor for the company, in addition to the strong recovery in its Compact variants during the month, which helped support the overall volumes. Tata Motors experienced difficulties during the month, with domestic volumes declining by 11.6% YoY. Green shoots were visible in its EV and export volumes; however, they failed to support the domestic decline. M&M, on the other hand, continued its double-digit growth rally, backed by the increasing demand in its SUV portfolio and improving traction in the newly launched XUV 3XO and electric SUVs. While Mahindra led wholesale dispatches in July, Hyundai edged ahead in retail registrations, highlighting stronger dealer throughput. This divergence points to inventory buildup at Mahindra and efficient stock rotation at Hyundai. Hyundai’s SUV-heavy portfolio continued to draw retail traction, even as overall market sentiment remained subdued. With the festive season kicking off soon, starting with Onam and Ganesh Chaturthi, automakers are gearing up for a likely demand revival. Early signs of recovery in urban markets and consumer sentiment point to a promising sales momentum in the coming months.
Two Wheelers
The 2W industry in July 2025 reported a healthy YoY growth of 13.2%. The volume momentum was sustained by double-digit growth across most OEMs. However, volumes declined 9.2% MoM, reflecting normalisation after a strong June and possible dealer-level de-stocking ahead of the monsoon. HMCL reported strong late teen-digit growth. The growth is on account of robust sales of scooters and exports. Retail sales also supported the monthly dispatch, with a record 339,827 VAHAN retail registrations for the month. VIDA also doubled its EV VAHAN market share YoY to 10.2%. The recently launched VIDA e-scooter VX2 contributed significantly to this growth. TVS Motors maintained strong traction, posting 21.4% YoY and 9.9% MoM growth, supported by healthy demand in both domestic and export markets. Electric vehicle sales rose by 10%, from 21,442 units to 23,605 units. However, the company cautioned that ongoing supply constraints, particularly in sourcing magnets, could impact production capacity in the near to medium term. Eicher Motors (Royal Enfield) continued its upcycle with 30.9% YoY growth, while MoM softness (-1.7%) was modest. Bajaj Auto stood as the sole outlier, reporting a 17.5% YoY decline and a 6.7% MoM drop, likely due to weak traction in domestic volumes.
Electric two-wheeler registrations declined 4% YoY and 3% MoM to ~1 lakh units in July, impacted by pre-festive demand softness and rare earth magnet shortages. TVS and Bajaj retained the top spots, while Hero MotoCorp gained share with steady growth. Ola Electric’s volumes more than halved YoY, slipping to third place, as Ather Energy closed the gap with strong traction and aggressive retail expansion.
Commercial Vehicles
The CV segment posted a strong performance in July 2025, with YoY growth visible across OEMs. The modest uptick in volumes is likely following the improved retail demand observed in June, following early deliveries before monsoon-induced slowdowns. The growth was led by M&M, which posted a sharp 33.2% increase, aided by robust LCV demand. Ashok Leyland (+4.4%), VECV (+5.8%), and Tata Motors (+3.9%) also posted positive YoY growth, indicating improving underlying momentum. Monthly decline was observed across OEMs, reflecting some post-quarter-end normalisation and monsoon-related logistical disruptions.
Tractors
The tractor industry saw an 8.7% YoY growth in domestic volumes in July 2025, led by Escorts Kubota (+23.9%) and steady growth by M&M (+5.5%). However, the overall MoM volumes plunged 46.4%, reflecting post-harvest seasonality and channel de-stocking ahead of the festive buildup. Exports fared better, with 9.9% YoY growth and a modest 5.8% MoM rise, indicating a stable demand environment abroad. Escorts led the export growth with a 25.3% YoY rise. Overall, while the YoY trend remains positive, domestic tractor sales moderated sharply on a monthly basis due to seasonal factors and high base effects from June.
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