Indian Auto Sector Struggles as Demand Slump Hits Major Carmakers in April 瞠025

The Indian automotive industry faced a mixed April 2025, with many top players battling declining sales as demand softened. While Maruti Suzuki and Mahindra & Mahindra (M&M) navigated the slowdown with relative success, Hyundai, Tata Motors, and others grappled with inventory challenges, macroeconomic headwinds, and shifting consumer preferences. This analysis unpacks the key trends shaping investment opportunities in India’s automotive sector.

Maruti Suzuki: Dominance Amid Stagnation

Maruti Suzuki maintained its position as India’s top automaker, reporting a 7% year-on-year sales increase to 1,79,791 units in April 2025. However, domestic passenger vehicle sales barely budged (up just 0.55% to 1,38,704 units), underscoring the broader market’s sluggishness. Investors should note that Maruti’s growth relied on export-driven demand rather than a retail revival.

Despite its market leadership, Maruti’s stock has underperformed the broader auto sector index over the past year, reflecting concerns about its reliance on traditional combustion-engine models.

Hyundai: Domestic Demand Plummets, Exports Offer a Glimmer

Hyundai Motor India’s April sales fell 4.6% to 60,774 units, with domestic sales dropping 11.6% to 44,374 units. The automaker cited “soft retail demand” and macroeconomic pressures, including higher interest rates and inflation. Exports, however, rose 21.5%, offering a silver lining. Yet, Hyundai’s wholesale sales declined sharply from March 2025 levels, indicating dealer caution.

Analysts warn that Hyundai’s reliance on its existing product lineup—without major launches in 2025—could limit recovery. Its COO’s focus on the upcoming Talegaon plant expansion (targeted for Q4 2025) remains critical to boosting efficiency and competitiveness.

Tata Motors: A Multifaceted Decline

Tata Motors’ April sales dropped 6.1% to 72,753 units, driven by a 5% decline in passenger vehicle sales and an 8% fall in commercial vehicles. The SCV segment, a Tata stronghold, saw a staggering 23% drop in sales, while electric vehicle (EV) sales fell 16% to 5,318 units—the seventh consecutive month of declines.

Tata’s struggles highlight broader industry challenges: EV demand remains uneven, and commercial vehicle sales are sensitive to interest rates and infrastructure spending.

Mahindra & Mahindra: SUV Dominance Fuels Growth

M&M emerged as a standout performer, reporting a 19% sales surge to 84,170 units, driven by a 28% jump in SUV sales. The Scorpio-N and XUV700 models solidified its position as India’s second-largest PV manufacturer. M&M’s export growth (82% year-on-year) and retail strength (outpacing Hyundai in March 2025) signal a strategic shift in the sector’s competitive dynamics.

M&M’s stock has outperformed peers, reflecting investor confidence in its SUV-focused strategy and export diversification.

Market Dynamics: SUVs Rise, Commercial Vehicles Lag

The SUV segment’s growth contrasts sharply with commercial vehicle (CV) struggles. While Eicher Motors’ CV sales rose 27.3% (benefiting from robust demand for trucks and buses), smaller LCV segments (<2T) declined across the board. Meanwhile, exports emerged as a lifeline for players like Kia (up 18.3%) and JSW MG Motor (up 23%).

Tractor and EV Sectors: Mixed Signals

Escorts Kubota’s tractor sales dipped 1.2%, though exports surged 67.4%. In EVs, JSW MG Motor’s Windsor EV maintained its segment lead, while Tata’s EV sales continued their slide. This underscores the fragmented EV market, where only niche players like MG are gaining traction.

Conclusion: Navigating the Indian Auto Landscape

April 2025’s data reveals a sector in transition. Investors should prioritize companies with:
1. Strong SUV portfolios: M&M’s dominance here positions it well for growth, while Hyundai’s lagging product pipeline is a risk.
2. Export diversification: Kia and JSW MG’s export gains highlight the importance of reducing reliance on a weakening domestic market.
3. EV resilience: Tata’s EV struggles contrast with MG’s success, suggesting that pure-play EV brands or those with scalable technology may outperform.

The broader auto sector’s performance remains tied to macroeconomic conditions. With India’s GDP growth expected to moderate in 2025–26, investors must balance growth opportunities in SUVs and exports with caution toward companies overexposed to CV or EV headwinds.

In this environment, M&M and JSW MG Motor appear well positioned, while Tata and Hyundai face near-term challenges. The sector’s winners will be those that adapt to shifting demand patterns and capitalize on export opportunities before the next upcycle.