India’s Auto Sales Shift Gears in May—Two-Wheelers Lead, PVs Stall

Image Source: Business Standard

India’s auto market posted mixed signals in May 2025, with two and threewheeler segments showing growth, while passenger vehicle (PV) sales dipped amid cautious consumer sentiment and inventory adjustments. According to data from the Federation of Automobile Dealers Associations (FADA) and industry reports, total retail sales rose 4.4% yearonyear, driven by rural demand and seasonal factors.

Key Highlights:

TwoWheelers: Sales reached 16,55,927 units, up 7.3% YoY, supported by a strong Rabi harvest, more auspicious wedding dates, and improved rural liquidity.
ThreeWheelers: Clocked 53,942 units, a 6.2% YoY increase, as urban mobility demand rebounded.
Passenger Vehicles: Domestic PV sales stood at 3,44,656 units, down 3.1% YoY and over 13% lower monthonmonth, due to marginmoney constraints and deferred purchases.
Macro Boosters: The RBI’s third consecutive rate cut and a forecast of abovenormal monsoons are expected to lift sentiment in the coming months, especially in rural and semiurban markets.
Challenges Ahead: Despite the uptick in twowheeler sales, concerns remain over rare earth supply disruptions affecting EV components and geopolitical tensions that could dampen urban demand.

While the PV segment faces headwinds, the overall outlook remains cautiously optimistic, with the industry banking on monsoondriven rural demand and lower borrowing costs to sustain momentum into the second half of FY26.

Sources: CNBCTV18, Economic Times Auto, FADA.