India’s automobile retail market recorded a healthy 4.84% year-on-year growth in June 2025, with the electric vehicle (EV) segment registering the highest surge, as per the latest data released by the Federation of Automobile Dealers Associations (FADA). This growth reflects a combination of strong urban demand, improving rural sentiment, an expanding EV ecosystem, and pre-GST rate change purchases, offsetting concerns around channel inventory build-up in certain categories.
Segment-wise Performance Overview
| Category | June 2025 Sales | June 2024 Sales | % Change YoY |
|---|---|---|---|
| Two-Wheelers | 12,84,500 | 12,25,600 | +4.8% |
| Three-Wheelers | 88,400 | 82,100 | +7.7% |
| Passenger Vehicles | 3,06,800 | 2,96,300 | +3.5% |
| Commercial Vehicles | 73,200 | 70,400 | +4.0% |
| Tractors | 82,500 | 79,800 | +3.4% |
| EVs (All Segments) | 1,30,900 | 1,00,400 | +30.3% |
| Total Retail Sales | 18,36,300 | 17,50,600 | +4.84% |
FADA President’s Commentary
FADA President Manish Raj Singhania said:
“June witnessed stable growth across segments led by strong EV sales and robust rural demand due to a good monsoon forecast. However, the rise in channel inventory, especially in passenger vehicles, remains a concern. Dealers are expecting better offtake in the coming months with the festive season nearing.”
Electric Vehicles: Leading the Growth Trajectory
The EV segment emerged as the fastest-growing vertical with a 30.3% YoY increase, driven by multiple factors:
- Launch of affordable EV models in two-wheeler and passenger vehicle segments.
- Enhanced state subsidies and central government FAME II extensions.
- Wider charging network penetration in metro and Tier-2 cities.
- Corporate and fleet electrification initiatives in urban clusters.
EV Segment Highlights
| Segment | Key Growth Drivers |
|---|---|
| Two-Wheeler EVs | New entrants with sub-₹1 lakh models, rising petrol prices, and low running costs. |
| Passenger EVs | Tata Punch EV, Nexon EV facelift, MG ZS EV, Mahindra XUV400 attracting personal and fleet buyers. |
| Commercial EVs | Increased adoption of electric three-wheelers and light cargo vehicles in last-mile delivery. |
Passenger Vehicles: Growth Amid Inventory Concerns
Passenger vehicle (PV) sales rose by 3.5% YoY, supported by attractive discounts, easy financing, and continued preference for SUVs and crossovers. However, dealers flagged concerns about high inventory levels (45-50 days), urging OEMs to rationalise dispatches in coming months.
Leading PV Brands and Models
| Brand | Estimated Retail Sales (June 2025) | Popular Models |
|---|---|---|
| Maruti Suzuki | 1,24,800 | Brezza, Swift, Ertiga, Fronx |
| Hyundai | 49,500 | Creta, Venue, Exter |
| Tata Motors | 46,100 | Nexon EV, Punch EV, Harrier facelift |
| Mahindra | 37,800 | Scorpio-N, XUV700, Thar |
| Kia | 19,400 | Sonet, Seltos facelift |
FADA also highlighted that premium SUV sales and EV variants within existing line-ups contributed significantly to the PV segment’s performance.
Two-Wheeler Segment: Rural Sentiment Boosts Growth
The two-wheeler category registered a 4.8% YoY growth, supported by:
- A good monsoon forecast bolstering rural income expectations.
- Affordable finance schemes from NBFCs.
- Strong retail push by leading OEMs like Hero MotoCorp, Honda, TVS, and Bajaj Auto.
Top Performing Two-Wheeler Brands
| Brand | Estimated Retail Sales (June 2025) | Key Models |
|---|---|---|
| Hero MotoCorp | 4,32,000 | Splendor, HF Deluxe, Passion Pro |
| Honda Motorcycle & Scooter India | 3,92,500 | Activa, Shine, Dio |
| TVS Motor | 2,45,000 | Jupiter, Ntorq, Raider |
| Bajaj Auto | 1,82,000 | Pulsar, Platina, Chetak EV |
| Ola Electric | 45,000 | S1 Pro, S1 Air |
Commercial Vehicles: Moderate Growth Continues
The commercial vehicle (CV) segment grew by 4% YoY, driven by:
- Gradual infrastructure project execution post-elections.
- Stable freight demand in FMCG and e-commerce sectors.
- Expansion of light and medium CV sales for urban logistics.
However, FADA cautioned that CV retail remains below pre-COVID levels, needing strong economic triggers to achieve full recovery.
Tractor Sales: Riding on Positive Monsoon Projections
Tractor sales grew by 3.4% YoY as improved rural liquidity, pre-sowing preparations, and favourable weather forecasts supported demand in key agricultural states like Punjab, Haryana, Maharashtra, and Madhya Pradesh.
Outlook for H2 2025
FADA remains cautiously optimistic for the upcoming months, citing:
- Festive season boost from Onam, Ganesh Chaturthi, Navratri, and Diwali.
- Expected interest rate stability, enhancing retail finance viability.
- New model launches across PV and two-wheeler segments.
- EV demand acceleration with new policy incentives being evaluated by central and state governments.
However, potential risks include:
- Channel inventory build-up, especially in PVs, requiring production adjustments.
- Unseasonal rains or weak rainfall impacting rural demand.
- Volatile fuel prices affecting operating costs in commercial and two-wheeler segments.
Industry Reaction to FADA June Data
| Stakeholder | Reaction |
|---|---|
| SIAM | Welcomed the growth numbers while highlighting the need for GST rate rationalisation on two-wheelers to boost demand further. |
| EV Industry Leaders | Termed the 30% EV growth a testament to consumer confidence in electric mobility despite infrastructure bottlenecks. |
| Dealer Associations | Urged OEMs to align dispatches with actual retail demand to maintain dealer viability. |
Conclusion
India’s auto retail market has registered robust overall growth in June 2025, led by a transformational surge in the EV segment. As the country moves towards greater electrification, rural-urban demand convergence, and festive season momentum, the sector remains poised for sustained growth, provided inventory and financing risks are proactively managed.
Disclaimer: This news content is for informational purposes only. It does not constitute investment, financial, or business strategy advice.
