New Delhi [India], January 3 : The Indian automotive sector concluded the final month of 2025 with robust performance across major segments, driven by improved macroeconomic conditions and positive rural sentiment.
According to a report by Asit C. Mehta Investment Interrmediates Limited (ACMIIL), the industry benefited from significant tailwinds, including GST rate rationalisation, lower interest rates for financing, and better affordability that sustained demand even after the conclusion of the festive season.
While sequential moderation was visible across most segments due to post-festive normalisation, the year-on-year trends remained exceptionally strong, signalling a healthy close to the last quarter of the calendar year.
In the passenger vehicle segment, retail traction remained a primary driver of growth, supported by pre-buying ahead of anticipated annual price hikes in January. Maruti Suzuki reported a 22.2 per cent year-on-year increase in total wholesales, propelled by a 36.4 per cent growth in domestic volumes. The report highlighted that "the sharp recovery in the mini segment followed the GST rationalisation in September," with pending bookings in mini cars remaining healthy at approximately one to 1.5 months.
Mahindra & Mahindra (M&M) also sustained industry-leading performance with domestic utility vehicle volumes growing 23 per cent year-on-year. Conversely, "Hyundai emerged as the weakest performer in Dec-25, with total wholesales rising just 6.6% YoY despite strong export growth," the report said.
The two-wheeler market displayed varying performance levels among top manufacturers. TVS Motors emerged as a top performer with a 47.8 per cent year-on-year growth in wholesales, which the report noted "translates into sustained wholesale outperformance."
Royal Enfield followed with 30.3 per cent growth, led by its sub-350cc portfolio. While Hero MotoCorp reported a 40.5 per cent increase, the report clarified that this growth occurred on a "very low base of last year" and that retail traction for the month was actually weak. Bajaj Auto's 14 per cent growth was largely export-driven, as its domestic volumes continued to lag behind the broader industry.
Commercial vehicles entered what appears to be a positive early-cycle uptick, reporting strong volume growth for the second consecutive month. M&M reported a 34.4 per cent increase in total commercial vehicle volumes, followed by Tata Motors at 25.5 per cent and Ashok Leyland at 27 per cent.
The report noted that "the CV industry continues to show early signs of an upcycle," with momentum expected to accelerate further into the next quarter as policy changes and infrastructure projects continue to drive logistics demand.
The tractor and three-wheeler segments also maintained healthy momentum through December. Tractor sales were bolstered by higher Rabi sowing, favourable minimum support prices, and improved farm sentiment. Both Mahindra and Escorts Kubota reported year-on-year growth exceeding 38 per cent.
In the three-wheeler category, TVS led with a 109.8 per cent increase, although this was against an impacted base from the previous year.
"Looking ahead, macros remain supportive of growth across segments. Pricing action announcements will have to be looked at to understand the impact on volumes and margins in the face of increasing commodity prices," the report said.
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