India’s automobile industry witnessed a mixed performance in May 2025, with total vehicle production across categories — Passenger Vehicles (PVs), Three-Wheelers, Two-Wheelers, and Quadricycles — reaching 25,82,207 units. While the aggregate output remained robust, retail trends revealed contrasting trajectories across segments.
Passenger Vehicle sales, which had reached a peak in May 2024, declined marginally by 0.8% to 3,44,656 units in May 2025, despite maintaining the second-highest May performance on record. This slight contraction highlights a temporary cooling in urban and premium segment demand, potentially driven by pre-buying in earlier months or constrained supply in select models.
Three-wheeler sales continued their sluggish streak, falling by 3.3% to 53,942 units compared to 55,763 units in May 2024. The segment, traditionally reliant on intra-city mobility and small fleet operators, may be facing headwinds from electrification transitions, uneven demand recovery in semi-urban markets, and cautious fleet expansions.
In contrast, the two-wheeler segment provided a silver lining, posting a 2.2% year-on-year growth with 16,55,927 units sold. The improvement, though modest, reflects stabilising rural sentiment and gradual improvement in disposable income, aided by the pre-monsoon demand cycle.
SIAM Director General Rajesh Menon noted that while segmental performance remained broadly stable, policy developments such as the Reserve Bank of India’s cumulative 100 basis points repo rate cut over six months, and an above-normal monsoon forecast, are expected to improve vehicle affordability and stimulate consumer sentiment. These macroeconomic tailwinds could support a more broad-based recovery in the months ahead, especially in entry-level and rural-driven segments.
While May’s figures do not indicate sharp growth, the auto industry remains cautiously optimistic, buoyed by improving liquidity conditions and positive rural forecasts, setting the stage for potential upticks in H2 FY2025.
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