The Indian automobile industry has seen healthy momentum for tractors, two-wheelers and three-wheelers in the final month of the fiscal year 2024-25. The CV segment has seen slightly improved performance for the quarter, while the PV segment has broadly remained in the mid-single digit growth zone. For FY25, 2-wheelers have seen growth in high single digits, 3-wheelers in mind-single digits, while PV segment reported low-single digit growth, in accordance with estimates for the year. CV segment was a laggard in FY25.
According to the latest report from Asit C Mehta Investment Intermediates Ltd., the month saw robust demand driven by festive season boost, new product launches, and consumers choosing to buy before price hikes become effective from April.
Passenger Vehicles (PV) Continues Muted Domestic Performance:
The PV segment showed positive performance overall, largely due to exports performing well. Domestic growth took a backseat for most OEMs, as was seen for the whole year of FY25. The slowdown in growth for the year was on back of consumer fatigue after strong growth in the past 3 years, and impact of inflation on discretionary spending. The SUV segment continued to see growth, while the hatchbacks continued to suffer through the year.
Two-Wheelers Register Strong Growth For The Month:
The two-wheeler segment posted a strong growth in March 2025, driven by heavy consumer demand during festive days in the month, and strong rural demand. The demand for electric two-wheelers also witnessed an uptick, supported by government incentives, new launches at attractive pricing and increasing consumer acceptance of EV technology. For FY25, 2W has been one of the better-performing segments in the automobile industry.
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.”
