New Delhi [India], 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.
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