Indian Auto Sales Decline 4.31% YoY in July: FADA Report

India's auto retail sales declined 4.31% YoY in July 2025, with two-wheelers falling 6.48%, passenger vehicles down 0.81%, and construction equipment plummeting 33.28%. However, three-wheelers, tractors, and commercial vehicles grew 0.83%, 10.96%, and 0.23% YoY, respectively. Dealers expect a post-monsoon uptick, with strategic stock alignment and rural-urban engagement key to reviving momentum.

Title: Auto Retail Sales in India: A Mixed Bag in July 2025

India's auto retail sales declined by 4.31% year-on-year (YoY) in July 2025, according to data released by the Federation of Automobile Dealers Association (FADA). The overall market showed signs of sluggishness, with significant variations across different vehicle segments. Two-wheelers (2W) saw a notable decline of 6.48%, while passenger vehicles (PV) and construction equipment (CE) segments fell by 0.81% and 33.28% respectively. Conversely, three-wheelers (3W), tractors, and commercial vehicles (CV) posted growth rates of 0.83%, 10.96%, and 0.23% respectively.

The decline in 2W sales can be attributed to a combination of factors, including crop-sowing activities and prolonged heavy rains that dampened rural demand more sharply than urban demand [1]. Despite this, dealers remain confident of a post-monsoon uptick, with several purchase decisions deferred to August ahead of the festive season. Strategic stock alignment and focused rural-urban engagement are expected to be crucial for reviving momentum [1].

The PV segment contracted due to the Aashaada period and muted urban demand, despite rural markets doing well. Urban demand remained restrained due to low enquiry and customer sentiment. Dealers are focusing on calibrated discounting, streamlined finance facilitation, and intensified urban outreach to sustain festive-season growth [1].

The CV segment posted a modest increase in sales, driven by urban momentum. Dealers cited new-model launches, aggressive marketing support, bulk institutional orders, and timely stock availability as key drivers. Rural haulage demand, however, remained fragmented due to heavy rainfall and seasonal softness in construction logistics [1].

The tractors segment delivered robust performance due to the timely release of enhanced agricultural subsidies and favorable monsoon rains, which spurred a marked increase in purchase intent [1].

In the two-wheeler market, Honda Motorcycle & Scooter India overtook Hero MotoCorp in July 2025, reaching 5,15,378 units. While Hero MotoCorp experienced a 21% growth, it wasn't enough to surpass Honda. TVS Motor Company maintained its third-place position with a 21.42% sales increase, while Royal Enfield saw a substantial 31% YoY rise [2]. Honda's overall sales in July 2025 exceeded 5 lakh units, reaffirming its position as the leading two-wheeler brand in the Indian market [3].

The passenger vehicle market showed muted growth in July 2025, with wholesale dispatches marginally rising to 3,46,669 units. While Maruti Suzuki and Mahindra & Mahindra posted stable or improving numbers, others such as Hyundai and Tata Motors witnessed notable slowdowns in domestic volumes. SUVs and electric vehicles (EVs) remained the mainstay of growth, even as small cars and sedans continued to lose ground. Tata Motors saw record EV sales of 7,124 units in July 2025, despite overall passenger vehicle sales dropping 11% YoY [4, 5].

Dealers and industry experts remain cautiously optimistic, with expectations for a post-monsoon uptick and a potential boost during the upcoming festive season. The focus on strategic stock alignment and rural-urban engagement will be critical in reviving market momentum.

References:
[1] https://www.thehindu.com/business/july-auto-retail-sales-decline-431-yoy-fada/article69906661.ece
[2] https://timesofindia.indiatimes.com/auto/bikes/two-wheeler-sales-july-25-honda-overtakes-hero-motocorp-heres-how-others-performed/articleshow/123097741.cms
[3] https://bikeadvice.in/honda-is-indias-top-2-wheeler-brand-in-july-2025-5-lakh-units-sold/
[4] https://www.autopunditz.com/post/july-2025-car-sales-snapshot
[5] https://www.timesnownews.com/auto/electric-vehicles/tata-motors-ev-sales-record-high-july-2025-passenger-vehicle-sales-decline-article-152390211