INDIA: 15th September 2025: India’s auto sector hit a speed bump in August 2025, with passenger vehicle sales stalling even as scooters, motorcycles and three-wheelers powered ahead, according to data from the Society of Indian Automobile Manufacturers (SIAM). The contrast underscores how mass mobility and exports are increasingly carrying the industry’s load while the passenger car market, once its anchor, shows signs of weariness.
Passenger Vehicles Hit Pause
Domestic passenger vehicle sales dropped 8.8 per cent year-on-year to 3,21,840 units in August — among the sharpest monthly declines in recent years. Utility vehicles, long the growth engine, dipped 1.8 per cent, while passenger cars and vans also softened. “Sales of Passenger Vehicles in August 2025 de-grew by (-)8.8%, posting sales of 3.22 lakh units as compared to August of previous year, primarily due to recalibration of dispatches by passenger vehicle manufacturers,” said Rajesh Menon, Director General, SIAM. The pullback highlights lingering fragility in what has been India’s strongest-performing segment post-pandemic.
Scooters Power Two-Wheeler Momentum
Two-wheelers emerged as the month’s bright spot, with sales climbing 7.1 per cent to 18,33,921 units. Scooters led the surge with 12.7 per cent growth, fueled by rising urban demand and accelerating adoption of electric models. Motorcycles posted moderate gains of 4.3 per cent as rural demand steadied, while mopeds slipped 1.5 per cent to 43,886 units. Companies with strong scooter portfolios such as TVS and Hero grabbed share, while EV player Ather nearly doubled volumes — a sign that electrification is beginning to register at scale. Royal Enfield also extended its premium streak, with domestic sales up 57 per cent.
Three-Wheelers Post Record August
The three-wheeler segment posted its best August ever, up 8.3 per cent to 75,759 units. Gains were broad-based across passenger and cargo carriers, while small-base e-carts expanded sharply. However, e-rickshaw volumes fell by almost half amid financing hurdles and regulatory headwinds. Bajaj, Mahindra, Piaggio and TVS lifted volumes, while early EV three-wheelers began featuring in the sales mix. “Three-wheelers posted their highest ever sales of August in 2025 of 0.76 lakh units, with a growth of 8.3% as compared to August 2024. Two-wheeler segment grew by 7.1%… The landmark decision of Government of India to reduce the GST rates on vehicles will go a long way in enabling broader access to mobility and inject fresh momentum into the Indian Automotive sector in the upcoming festive season,” Menon added.
Exports Deliver a Cushion
Exports reinforced India’s position as a small-vehicle hub, rising 28.5 per cent year-on-year in August. Passenger vehicle exports rose 24.6 per cent, two-wheelers climbed 27.6 per cent, and three-wheelers surged nearly 50 per cent. For manufacturers, overseas demand provided a hedge against local softness, keeping factories running and output balanced. Mahindra posted robust export growth while also expanding SUV sales at home, offsetting pressure on rivals such as Maruti, Hyundai and Kia, which grappled with slower utility volumes in the domestic market.
Diverging Company Fortunes
OEM performances were uneven. Maruti Suzuki’s domestic sales held flat as SUVs slipped but smaller models steadied. Hyundai and Kia logged softer volumes on high-selling utilities under competitive pressure. Mahindra extended its winning run in SUVs, lifting domestic volumes to nearly 50,000 units, and delivered strong export growth. In two-wheelers, Hero and TVS rode scooter demand, Royal Enfield extended its premium streak, and Ather drew attention with strong double-digit EV growth.
What’s Next
With the festive quarter around the corner, hopes rest on the GST rate cut, improving rural sentiment and new model launches to reignite passenger vehicle demand. For now, August confirmed one trend: motorcycles, scooters, three-wheelers and overseas buyers are firmly in the driver’s seat, while passenger cars have slipped to the back row.
