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Key Points

India's auto sector is expected to show weak retail performance in June 2025, with flat growth for two-wheelers and tractors but declines in CVs and PVs. Weak financing options and competition from used cars are major factors. The ICV segment, however, is growing due to rising CNG demand. Meanwhile, electric two-wheelers face supply chain issues ahead of festive season launches.

Key Points: India Auto Sector Sees Weak June Retail Growth in 2025 Report

  • Weak retail trends due to financing hurdles and used car competition
  • MHCVs decline on damp fleet sentiment
  • ICV segment grows with CNG demand surge
  • Two-wheelers see flat growth amid rare earth shortages
2 min read

India's Auto sector to show weak retail trend in June, flat to single digit growth: Report

India's auto sector faces flat to single-digit growth in June 2025, with CVs and PVs declining due to weak demand and financing challenges.

"Weak retail trends for Jun'25 YoY: flat to mid-single digit growth for 2W/tractor, and flattish to mid-high single-digit decline for CV and PV – Yes Securities Report"

New Delhi, July 1

The automobile industry in the country is expected to report mixed performance across segments for June 2025, with flat to mid-single digit growth projected for two-wheelers and tractors, and a flattish to mid-high single-digit decline likely for commercial vehicles (CVs) and passenger vehicles (PVs), according to a report by Yes Securities.

The report cited weak conversion rates, lack of new launches, financing challenges for upgrades, and better options in the used car market as key reasons for the subdued performance of the sector.

It highlighted weak retail trends for June 2025 on a year-on-year basis. In the commercial vehicle segment, medium and heavy commercial vehicles (MHCVs) remained muted, primarily due to damp fleet sentiment and continued weakness in heavy commercial vehicles.

It stated "weak retail trends for Jun'25 YoY: flat to mid-single digit growth for 2W/tractor, and flattish to mid-high single-digit decline for CV and PV".

Bus demand also experienced a seasonal slowdown. However, the intermediate commercial vehicle (ICV) segment recorded growth driven by increased demand for CNG vehicles.

While May and June 2025 volumes saw some support from pre-buying ahead of a dual price hike of approximately 2.5-3 per cent, the overall inquiry pipeline across regions, including North India, stayed extremely weak.

As a result, channel partners are focused on clearing inventory, which is expected to fall to 15-20 days by the end of June 2025, compared to 30-35 days in May 2025.

In the two-wheeler segment, the report added that the retail sales are expected to grow flat to mid-single digits, supported by healthy volumes from the West and North regions.

However, the supply of rare earth materials has started impacting electric two-wheelers, with noticeable signs of scarcity. Notably, TVS is expected to announce around three new product launches ahead of the festive season.

The passenger vehicle segment continues to see stable to weak demand, with retail expected to decline by a high single digit in June 2025.

Discounts on PVs are expected to remain flat on a month-on-month basis but elevated compared to last year.

The tractor segment is likely to register flat to low single-digit year-on-year growth. Demand momentum continues when adjusted for seasonality, and both inventory levels and discounts have remained stable month-on-month.

- ANI

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Reader Comments

S
Shreya B
The government needs to look at reducing GST on automobiles. 28% is too high when common people are struggling with inflation. This could really boost the sector and create more jobs.
A
Aman W
As someone working in auto finance, I can confirm loan rejections have increased by 30% compared to last year. Banks are being extra cautious after the pandemic defaults. Tough times for middle-class buyers.
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Priya S
The electric vehicle segment is interesting though! Despite rare earth material issues, I see more and more EVs on Delhi roads. Maybe this slowdown will push manufacturers to focus on sustainable options. âš¡
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Nikhil C
Respectfully disagree with the report's conclusion about weak demand. In Bangalore, showrooms are packed during weekends. Maybe it's regional - South India seems to be buying more vehicles than North currently.
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Kavya N
The festive season will change everything! Indians always wait for Diwali/Dussehra to make big purchases. These June numbers don't tell the full story. Wait for Q3 results! 🪔

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