Car sales in India dip again in June amid weak buyer sentiment, SUVs continue to thrive

In June 2025, the Indian passenger vehicle market registered mixed results. Two major players, Maruti Suzuki and Hyundai, recorded 13 per cent and 12 per cent domestic sales declines, owing to the weak small car demand and geopolitical crisis. On the other hand, automakers such as Mahindra, Toyota, and MG Motor that sell SUVs and not small cars, witnessed a significant growth last month, which was driven by robust demand for utility vehicles as well as electric vehicles.

The Indian passenger vehicle market, which was once driven by small cars, has evolved drastically over the last couple of years. Keeping in sync with the global trend, the Indian PV market has been witnessing continuously rising demand and sales for the larger utility vehicles such as crossovers, SUVs and MPVs. The demand is not only visible in the internal combustion engine (ICE) propelled segment, but in the electric vehicle (EV) domain as well.

Weighed down by a slowdown in retail demand, car manufacturers reduced passenger vehicle supplies to the auto dealers in June. This resulted in a seven per cent year-on-year (YoY) decline in wholesale dispatch numbers. Seven of the country's largest car manufacturers, cumulatively accounting for 95 per cent of the domestic PV market, dispatched 300,226 units to their dealer networks last month. Owing to the subdued consumer sentiment, three of the top four passenger vehicle manufacturers in India posted YoY declines in June sales.

Maruti Suzuki, Hyundai, Tata Motors: Small car woes continue

Since 2019, the Indian PV industry’s entry-level price point has increased by more than 70 per cent, which was largely driven by stricter safety and emission regulations. Over the same period, sales of small cars have dropped by more than 70 per cent. This has directly impacted the carmakers such as Maruti Suzuki, Hyundai and Tata Motors in an adverse manner.

Maruti Suzuki, India's largest car manufacturer, registered its weakest domestic monthly sales in more than 18 months. The OEM that has the largest pool of small cars saw a 13 per cent YoY drop in wholesale volumes, down to 118,906 units in June 2025 compared to 137,160 units sold in June last year. The OEM grappling with this significant demand slump last month reflected broader challenges in the PV market, especially in the entry-level segment. The small car segment’s decline reflects an affordability crisis despite 6.5 per cent GDP growth.

For example, small cars like Alto K10 and S-Presso saw sales plummet to 6,414 units from 9,395 units. On the other hand, sales of compact models like Baleno, Celerio, WagonR, Swift, Ignis, and Dzire declined to 54,177 units from 64,049 units. For Maruti Suzuki, sales of utility vehicles, including Grand Vitara, Brezza, and Jimny, dropped to 47,947 units from 52,373 units, despite high demand for SUVs.

Another major player in the Indian PV market with small cars on sale, Hyundai too reported a 12 per cent dip in wholesale numbers, with 44,024 units sold as compared to 50,103 units recorded last year. The South Korean auto giant that sells models like Grand i10, i20, Exter, Creta, Verna, etc, has blamed this on the geopolitical crisis and low consumer sentiment as key factors and anticipates recovery with lower repo rates, improving liquidity and the Talegaon plant production.

Tata Motors too posted a steep decline, with its wholesale volume slumping 15 per cent YoY in June to 37,083 units, including electric vehicles. While demand for its ICE-powered models came under pressure, the homegrown auto company noted continued strength in its EV portfolio, where it sells models like Tiago EV, Tigor EV, Punch EV, Nexon EV, Curvv EV, and recently introduced Harrier EV.

Among others, Kia recorded a three per cent YoY sales slump at 20,625 units in June 2025. Honda Cars India too reported a 22 per cent sales slump with 5,124 units in June 2025, comprising 4,618 units sold in the domestic market and 506 units exported. Domestic sales of the company dropped by 3.9 per cent, while exports saw a slump of 89.8 per cent YoY.

Mahindra, Toyota, MG buck the slumping trend

Mahinda is the only car manufacturer among the top four in the Indian passenger vehicle market that reported growth last month. The homegrown auto giant retained its second position in the sales chart last month. The SUV-specialist brand registered an 18 per cent YoY wholesale growth, ending the last month with 47,306 units. The OEM sells some of the popular SUVs like Thar, XUV 3XO, XUV700, Scorpio N, Bolero Neo, Scorpio Classic, Thar Roxx, etc.

Toyota Kirloskar Motor too was able to buck the trend slightly. The automaker registered a modest three per cent YoY increase in June wholesales with 26,453 units. The carmaker sells popular models like the Innova Crysta, Fortuner, among others.

JSW MG Motor India charted a 21 per cent YoY sales growth in June sales numbers, with 5,829 units sold. The automaker sells models like the Hector, ZS EV, Comet, Gloster, etc. However, since the launch of the Windsor EV, MG has been witnessing continuous growth in its PV sales.

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