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India’s auto sales dipped 4% YoY in May 2025, led by an 8.6% drop in passenger vehicles. Two-wheeler and EV segments saw growth, while SIAM projects subdued FY26 growth. Weak urban sentiment, SUV preference, and high costs weigh on the market amid evolving buyer trends.
Auto sales in May are set to record a year-on-year (YoY) decline of about 4%. As per Vahan data, total vehicle registrations stood at 2.03 million units as of 3 pm on Saturday, compared to 2.11 million units in May 2024—a drop of approximately 4%.
The sharpest decline was seen in the passenger vehicle (PV) segment, which fell by approximately 8.6% in May 2025, with sales dropping to 2,80,877 units from 3,07,356 units in the same month last year.
The Society of Indian Automobile Manufacturers (SIAM) has projected FY26 would see subdued growth of 1-2% in the passenger vehicles segment and the auto industry as a whole. The cautious outlook has been attributed to weak urban sentiment, a rising preference for costlier SUVs and declining affordability.
In contrast, two-wheeler sales rose by 3.28%, reaching 1.59 million units in May 2025, up from 1.54 million units in May 2024.
The three-wheeler segment posted marginal growth of less than 1%, with sales increasing to 99,700 units compared to 99,154 units in the year-ago period.
The electric vehicle (EV) segment maintained its YoY growth in May, recording a 16.12% increase in sales. A total of 1,63,341 EV units were sold in May 2025, compared to 1,40,666 units in May 2024.
Intensifying competition and the increased availability of products from legacy players boosted EV sales, particularly in the two-wheeler segment.
In April, the auto industry posted a modest year-on-year (YoY) growth of 3% in overall retail sales, as per FADA. All categories, except commercial vehicles (CVs), registered positive growth. Two-wheelers (2W) grew by 2.25%, three-wheelers (3W) by 24.5%, and passenger vehicles (PVs) by 1.5%, while CVs saw a decline of 1%.
FADA had earlier projected that two-wheeler sales would benefit from marriage season demand and post-harvest purchases. In the PV segment, it expected sales to remain steady but subdued, as buyers await new model launches and face high financing costs.
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This article was first uploaded on May thirty-one, twenty twenty-five, at forty-two minutes past nine in the night.
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