The Indian automobile industry closed FY 2024-25 with strong momentum in March, led by healthy demand for tractors, two-wheelers, and three-wheelers. The commercial vehicle (CV) segment showed slight improvement in Q4, while passenger vehicles (PVs) maintained mid-single-digit growth.
For the full fiscal year, two-wheelers posted high single-digit growth, three-wheelers saw mid-single-digit gains, and PVs reported low-single-digit growth—largely in line with expectations. The CV segment lagged behind.
As per Asit C Mehta Investment Intermediates Ltd., March demand was fueled by festive season tailwinds, new product launches, and pre-price-hike purchases ahead of April.
Passenger Vehicles see muted domestic growth, exports drive overall performance: The passenger vehicle (PV) segment ended FY25 on a modest note, with overall growth largely supported by strong export performance. Domestic sales remained subdued across most OEMs, reflecting a year-long trend. Slower growth was attributed to consumer fatigue following three years of strong demand and the impact of inflation on discretionary spending. While SUVs continued to perform well, hatchbacks struggled throughout the year.
Two-Wheelers deliver robust growth in March: The two-wheeler segment recorded strong growth in March 2025, fuelled by festive season demand and solid rural uptake. Electric two-wheelers also saw rising traction, supported by government incentives, attractive new models, and growing consumer confidence in EVs. Overall, two-wheelers emerged as one of the top-performing segments for FY25.
Commercial Vehicles (CV) see improvement in trajectory:The commercial vehicle segment performed well in March, leading to good growth for Q4FY25. The quarterly performance was an improvement as compared to subdued performance for 9MFY25, mainly on account of a favourable base. Sustainable demand improvement is yet to be seen. Exports saw strong traction across most OEMs for the month as well as the full year.
Three-Wheelers maintain strong performance: The three-wheeler category sustained its growth momentum, supported by a rise in last-mile connectivity solutions. The transition to electric three-wheelers gained further traction, contributing to the segment’s expansion.
Electric Vehicles (EVs) see rising adoption: The EV market in India continued its upward trajectory, with increasing adoption across passenger vehicles, two-wheelers, and three-wheelers. Despite a reduction in Government subsidies, the growth has been driven by a slew of new launches across segments, with better features and competitive pricing.
Ms. Mrunmayee Jogalekar, Auto and FMCG Research Analyst, Asit C Mehta Investment Intermediates Ltd said,” The auto sector exceeded estimates in March 2025, driven by positive festive season sentiments, new launches, and preponement of buying decisions due to price increases scheduled from April. Segment-wise, Royal Enfield led the 2W segment with 33.7% YoY growth, followed by healthy performances from TVS and Hero MotoCorp. M&M continued to outperform in the PV segment with high-teens growth. The CV segment saw SML Isuzu and M&M leading the charge, and M&M’s 46.8% YoY growth, albeit on a low base, propelled the 3W segment. The tractor segment continued its strong growth trend, with M&M gaining market share. Key trends included exports outperforming domestic sales, festive season sentiments and timing shift driving growth, and price increases scheduled for April leading to preponement of buying decisions.
Looking ahead, FY26E is expected to largely see normalized growth levels across 2W (mid-high single digit) and PVs (low single digit) while tractors may see healthy performance. CV’s trajectory is yet to see a sustainable improvement, but may benefit from a low base and uptick in infrastructure activity. Overall EV segment is likely to see an uptick, aided by a slew of new products flooding the market, with attractive features and lower price points.”
