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Automobile Market Trends: Mixed Segment Performance; Strong 3W & Tractor Growth, Modest PV/2W Momentum

The Indian automotive industry registered a modest 3.0% YoY growth in retail sales for April 2025, reflecting mixed performance across segments. 2W sales rose by 2.3% YoY, supported by improving rural sentiments and steady demand recovery. PVs grew by 1.4% YoY, driven by continued interest in both ICE and EV models. The 3W segment posted a robust 24.5% YoY growth, aided by increased urban mobility and shared transport demand. Tractor sales grew by 6.8% YoY, indicating healthy rural and agricultural activity. However, CVs declined by 2.4% YoY, reflecting weak fleet replacement demand and a high base. OEMs' price hikes effective April 1, 2025, led to pre-buying in March, resulting in largely flat sequential growth. The overall momentum was supported by moderate consumer spending, infrastructure push and early signs of rural recovery.

Auto OEM Dispatches:

Strong April Sales – Eicher & TVS Dominate, M&M & MSIL Power SUV Boom

In April 2025, the 2W segment recorded modest growth, supported by robust export performance and a gradual domestic recovery. TVS Motors and Eicher Motors led export growth, posting YoY increases of 45.9% and 54.5%, respectively. Dispatches for TVS Motors and Eicher Motors rose 14.9% and 5.7% YoY, reflecting a rising consumer shift toward premium motorcycles. On the other hand, Hero reported a sharp YoY decline of 42.8%, primarily due to a temporary production halt at four of its plants. Bajaj Auto declined by 7.0% YoY, indicating pressure in selectd segments.

The PV segment reflected a clear shift in consumer preference toward utility vehicles, with SUV demand driving the growth. M&M reported a robust 27.6% YoY increase in dispatches, led by strong SUV sales, while MSIL recorded a 7.0% YoY rise, primarily due to its SUV portfolio. However, MSIL’s passenger car segment declined during the month. In contrast, Tata Motors and Hyundai reported a YoY decline in dispatch volumes.

The CV segment showed a mixed performance—Eicher Motors (VECV) posted a strong 27.3% YoY growth, and M&M reported a modest increase of 3.1% YoY, while Tata Motors witnessed a 5.1% YoY decline.

Inventory Analysis: Assessing Dealer Inventory Levels Across Key Vehicle Segments

For PVs, Maruti Suzuki's dealer inventory peaked at 35 days in March 2024 and is currently at a healthy level of 20 days, lower than its 1-year average of 23 days. M&M, however, has had higher average inventory levels compared to Maruti, and its current dealer inventory stands at 35 days, slightly higher than its 1- year average of 33 days.

In the 2W segment, dealer inventory peaked in the Aug-Oct 2024 period, with dealers stocking up inventory for the festive season. TVS Motors and Eicher Motors currently have inventory levels around their 1-year average, indicating healthy inventory management. In contrast, Bajaj Auto and Hero MotoCorp are currently operating at below-average inventory levels, indicating a cautious stance on channel filling amid weaker retail demand or production-related constraints.

In the CV segment, Ashok Leyland's inventory stood at 61 days in April 2025 — the highest level in the past year — indicating a consistent build-up trend. The elevated inventory suggests the company has been pushing more stock into the channel, potentially putting pressure on dealers amid subdued CV demand over the last year.

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