Car Sales Report June 2025 in India

June 2025 turned out to be a challenging month for India’s car industry. Leading manufacturers like Maruti Suzuki, Tata Motors, and Hyundai reported noticeable declines in their domestic sales. The overall sentiment in the passenger vehicle market remained cautious, with high dealer inventories and restrained customer demand in urban centers impacting wholesale dispatches.

Maruti Suzuki, India’s largest carmaker, recorded a significant drop in its domestic dispatches, moving around 118,900 units, down from roughly 137,000 units in the same month last year. Tata Motors, another key player, also faced headwinds, witnessing a drop of around 12 to 15 percent in its domestic sales. Hyundai, which typically holds strong in urban and semi-urban markets, saw its domestic sales slip to about 44,000 units, marking a similar year-on-year decline.

Summary

• Maruti Suzuki reported a 13% drop in domestic dispatches, falling to 118,906 units from 137,160 in June 2024. Total dispatches (domestic + export) declined 6% to 167,993.
• Tata Motors saw a 12–15% dip to around 65,019 units of domestic sales—their lowest since December 2021.
• Hyundai India reported a 12% decrease in home market sales to 44,024 units, though exports partially offset the shortfall (16,900 vs 14,700 YOY).

Falling sales resulted in bloated dealer inventories, rising to about 50–53 days—far above the optimal ~30-day level—sapping cash flow and dealer confidence

Rising input costs, tighter regulatory norms that have pushed up car prices over the years, and weakening sentiment among entry-level car buyers were key reasons behind this slowdown. The compact car segment was especially under pressure, affecting manufacturers heavily dependent on hatchbacks and small sedans.

Bright Spots in Car Sales Report June 2025 in India

Amid the downturn, select players stood out:

• Mahindra & Mahindra impressed with a 14–18% YOY jump in June to 78,969 units, powered by SUV demand (47,306 units; +18%). Its three‑wheeler sales surged too (+37%). M&M overtook Hyundai to become India’s second-largest PV maker.
• Kia India posted a 12.7% rise in H1 FY2025, with 142,139 units, including 11,813 exports. The upcoming launch of the Carens Clavis EV suggests continued momentum .
• Toyota Kirloskar Motor (TKM) sold 26,453 domestic units (+10% YOY), with total June wholesales of 28,869 including 2,416 exports (+5%). However, this marked a 9.7% decline month-over-month from May.
• Audi, as a luxury brand, saw a 14% drop in H1 sales to just 2,128 units .

Key Market Drivers and Challenges

1. Shift in Consumer Preference
   The biggest trend shaping the market is the shift toward SUVs. More than half of passenger vehicle volumes now come from this segment. Consumers continue to favor vehicles that offer a higher driving position, more space, and a stronger road presence.
2. Pressure on Entry-Level Cars
   The entry-level hatchback segment has come under severe pressure due to price increases triggered by regulatory changes and safety upgrades over the past few years. This has pushed many first-time buyers to delay purchases or explore pre-owned options.
3. Dealer Inventory Concerns
   With sluggish retail movement, dealer inventory levels have swelled to about 50 to 53 days of stock, well above the ideal benchmark of around 30 days. This ties up dealer capital and increases the risk of discounting, putting additional pressure on margins.
4. EV and Supply Chain Watch
   While electric vehicle volumes are still a small portion of the overall pie, manufacturers are betting big on this segment for future growth. However, supply chain concerns, particularly around sourcing key components, pose challenges that could slow down short-term momentum.

Forward Outlook

• Market growth for FY 2025–26 is forecast at a modest 1–2%—down from ~2% last year.
• Automakers like Hyundai, Tata, and Toyota are banking on new model launches to revive momentum .
• Mahindra and Kia are well-positioned—driven by SUVs, export push, and EV roadmap (e.g., Carens EV).
• EV chains face headwinds from rare-earth scarcity, possibly constraining short-term volume growth .
• Dealer destocking may result in cautious wholesales ahead of key festival-quarter windows.

Key June 2025 Car Sales Snapshot

Strategic Takeaways

1. Affordability crunch in small car segment - regulatory compliance raised prices, squeezing demand.
2. SUV dominance continues - largest resiliency in consumer spending, led by Mahindra, Kia, Toyota.
3. Inventory pressure may trigger incentive-based strategies and production adjustments.
4. EV future ahead of curve - growth is real but depends on critical supply chains and regulations.
5. Model refresh pulse - OEMs are reliant on new launches to sustain interest and offset cyclical softness.

Conclusion

June 2025 signals a turning point in India's car market: traditional segments (compact hatchbacks, sedans) are losing ground, while SSUVs and green vehicles drive growth. Mahindra and Kia lead the way, but success hinges on new model rollouts, dealer inventory correction, and securing EV supply chains. The market expects tepid recovery ahead, making execution in these areas vital.

FAQs on Car Sales Report June 2025 in India

Q1. Which car company sold the most cars in June 2025 in India?

Maruti Suzuki remained the top-selling car manufacturer in June 2025, despite a decline in sales, delivering around 118,900 units in the domestic market.

Q2. Why did car sales drop in June 2025?

Car sales fell mainly due to weak urban demand, high vehicle prices caused by regulatory costs, and an overall slowdown in small car purchases. Rising dealer inventories also affected wholesales.

Q3. Which companies saw growth in June 2025 despite the slowdown?

Mahindra & Mahindra, Kia, and Toyota were among the few manufacturers that reported year-on-year growth, driven largely by strong SUV sales.

Q4. How did SUV sales perform in June 2025?

SUVs continued to dominate the market, making up more than half of passenger vehicle sales. Mahindra, Kia, and Toyota benefited the most from this trend.

Q5. What is the outlook for car sales in India for the rest of 2025?

The market is expected to grow modestly by 1–2% for the rest of the financial year. New model launches and festive season demand could help improve sales.