SUVs drive April auto sales up 4% as entry-level buyers hold back

Economic Times

15-05-2025

Sales of cars, sedans and utility vehicles last month grew by about 4% supported by demand for SUVs which managed to retain traction among more affluent buyers, even as customers at the entry-level stayed away from making purchases dragging down sales of small cars.
As per data released by industry body Society of Indian Automobile Manufacturers (SIAM), as many as 348,847 units were dispatched from factories to dealerships in April, which is an increase of 3.9% over 335,629 units sold in the year-ago period. This is the highest-ever sales in absolute volumes recorded for the month of April in the local market.
Automakers in India mostly report wholesale dispatches from factories and not retail sales to customers. Sales of three-wheelers in the month under consideration dipped marginally - by 0.7% to 49,441 units. Those of two-wheelers too were in the red dropping by about 17% to 1,458,784 units in April. While sales of motorcycles declined by 22.7% to 871,666 units, those of scooters fell by 5.7% to 548,370 units. Rajesh Menon, Director General, SIAM confirmed, 'Passenger vehicles segment posted its highest ever sales of April in 2025 of 3.49 lakh units, with a growth of 3.9% as compared to April 2024. Three-wheelers de-grew marginally by (-) 0.7% compared to April of previous year, with sales of 0.49 lakh units. The two-wheeler segment de grew by (-) 16.7% in April 2025, as compared to April 2024, with sales of 14.59 lakh units, due to high base effect of April last year, while it is likely to pick up in coming months.'
Senior industry executives expect car sales to remain muted and grow by about 2% in the ongoing financial year, albeit on a high base, due to adverse macro-economic factors in the ongoing financial year. 'Without revival of the small car market, growth in the domestic industry will remain muted. To buy a carpriced over Rs 10 lakh, you need to have annual household income of more than Rs 12 lakh. How can the car market get to high growth when 88% of households earn less than $14,000 a year', Maruti Suzuki Chairman R C Bhargava said in a post-earnings call recently, adding that 60-70% of consumers today do not have the option to buy a carbecause of affordability issues.Two-wheeler sales, though, are expected to fare better driven by consumer demand in rural areas. Market leader Hero MotoCorp in it's post-results call said it expects two-wheeler sales this fiscal to grow by 6-7% on back of favourable monsoons, strengthening of the rural economy, revision in income tax slabs which are expected to put more money in hands of motorcycle buyers. To be sure, vehicle prices in the segment have risen recently - by about 2% - on account of implementation of OBD2 (onboard diagnostic norms), but industry watchers do not expect much impact of demand because of the price revision on this count. 'Auto industry smoothly transitioned to the new regulatory regime of 2nd stage of On Board Diagnostics (OBD) 2 regulation for two and three-wheelers from April 2025 onwards, in addition to rolling out E-20 compliant gasoline vehicles across the country from this month', Menon said. Category April 2024 April 2025 % Change PassengerVehicle / 3,35,629/ 3,48,847/ 3.9 Three-wheelers/ 49,774/ 49,441/ -0.7% Two-wheelers/ 17,51,393/ 14,58,784/ -16.7%
Domestic sales only Source : Society of Indian Automobile Manufacturers (SIAM)