The first month of FY2025–26 has opened on a subdued note for the Indian auto industry. Society of Indian Automobile Manufacturers (SIAM) total vehicle production across segments in April 2025 stood at 23,18,882 units, a 1.7 percent year-on-year decline compared to 23,58,611 units in April 2024. While passenger vehicles recorded their highest ever April domestic sales, two-wheelers witnessed a sharp decline. Exports grew by 15.6 percent overall, driven primarily by motorcycles and passenger vehicles.
As the industry grapples with high ownership costs, cautious rural sentiment, and global trade uncertainties, the April figures signal that the path to recovery in FY26 could remain uneven.
Passenger Vehicles Shows Slight Uptick But Demand Still Patchy
Passenger vehicle sales in April 2025 reached 3,03,648 units (excluding Tata Motors), compared to 2,87,746 units in April 2024, marking a 5.5 percent increase. Including Tata Motors, domestic sales reached 3,48,847 units, against 3,35,629 units last April, a more modest 3.9 percent growth.
Production of passenger vehicles rose by 10.8 percent to 3,89,202 units, compared to 3,51,290 units a year earlier. Exports stood at 59,395 units, up by 19.8 percent.
The growth continues to be fuelled by utility vehicles, which saw a sharp 16.9 percent rise in production and a 12.1 percent increase in domestic sales. Passenger cars, by contrast, grew just 3 percent in production and fell by 5.4 percent in domestic sales. Vans declined across production and sales as well.
This reflects a broader industry shift, where buyers are opting for larger, feature-rich vehicles, while entry-level cars remain under pressure due to rising compliance costs and price sensitivity in mass segments.
Two-Wheelers Display Domestic Recovery Amid Export Decline
The two-wheeler segment, often considered a reliable volume driver, posted worrying signs. Domestic sales dropped sharply by 16.7 percent year-on-year to 14,58,784 units in April 2025, down from 17,51,393 units in April 2024. This dip was attributed by SIAM to a high base effect and transitional adjustments due to the implementation of new OBD-2 and E20 norms from April.
Motorcycle sales were the hardest hit, falling 22.7 percent to 8,71,666 units. Scooters fell by 5.7 percent to 5,48,370 units, while mopeds declined 7.6 percent to 38,748 units.
Production fell 4.1 percent to 18,52,866 units from 19,32,986 units in April 2024.
However, exports saw a 14.7 percent recovery, rising from 3,21,050 units last year to 3,68,201 units this April. This is largely due to a rebound in overseas demand for motorcycles, which increased 22.9 percent to 3,13,008 units. Scooters and mopeds also registered positive export momentum. This trend may indicate that while domestic demand remains constrained, Indian manufacturers continue to hold strong positions in emerging export markets.
Three-Wheelers Are Holding Steady
The three-wheeler segment remained nearly flat in domestic terms, with April 2025 sales at 49,441 units, a 0.7 percent decline from 49,774 units last year. Passenger carriers showed a marginal 2 percent increase to 40,167 units, but goods carriers fell 7.7 percent to 8,135 units. E-rickshaw sales declined 36.5 percent to 830 units, while e-carts grew by 16.6 percent to 309 units.
Production increased to 76,603 units from 73,579 units last year. The standout in this segment was exports, which rose 22.4 percent from 22,481 units to 27,524 units, likely aided by growing demand for affordable urban mobility solutions in overseas markets.
Sales of quadricycles continued their negligible contribution to the overall picture. Only 3 units were sold in April 2025 compared to 19 in the same month last year, representing an 84.2 percent drop. Production also fell drastically to 211 units from 756.
Looking Forward
April marked the start of India's implementation of Stage 2 OBD norms and full-scale rollout of E20 compliant vehicles. While the industry has transitioned smoothly, the shift likely added cost pressures, particularly on price-sensitive two-wheeler and small car segments.
Rajesh Menon, Director General, SIAM, acknowledged the transition while highlighting that the two-wheeler decline was impacted by a high base. He also noted that passenger vehicles posted their best-ever April sales.
The stark divide between passenger vehicle resilience and two-wheeler contraction hints at growing polarisation in Indian vehicle ownership patterns. Premiumisation in PVs continues, while affordability remains a barrier in two-wheelers and entry-level cars.
The sharp recovery in exports across segments offers some relief, but the domestic market will need stronger rural support and policy intervention, especially in terms of financing and affordability, to deliver broad-based growth in FY26.
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