The Indian automotive sector displayed contrasting trends in August 2025, with two-wheeler manufacturers posting strong growth while passenger vehicle sales declined, according to a new report from BNP Paribas Securities India.
The report, authored by research analyst Kumar Rakesh, indicates that domestic passenger vehicle wholesale volumes fell approximately 8% year-on-year in August, with most original equipment manufacturers reporting lower dispatches due to muted demand and inventory corrections ahead of expected GST rate reductions.
In stark contrast, domestic two-wheeler sales demonstrated robust year-on-year growth of 11%, despite modest retail registration growth, suggesting manufacturers are building inventory in preparation for the festive season. The early start of the festive period also contributed to retail growth momentum.
“Most of the PV OEMs reported lower dispatches, as demand was muted, likely hurt by deferred buying over the last few days of the month and inventory correction ahead of the GST rate cut,” the report states.
Commercial vehicle sales managed positive growth of 7% year-on-year despite the seasonally weak month, benefiting from a low comparison base from the previous year. Three-wheeler volumes increased 12% while tractor dispatches rose 27% with broad-based industry growth.
Export performance remained strong across multiple vehicle categories, with several manufacturers reporting significant increases in overseas shipments. The report notes that freight rates declined month-on-month in August, reflecting subdued logistics activities during the monsoon season.
Among individual company performances, Toyota Kirloskar Motor gained domestic market share year-on-year, while established players including Tata Motors, Maruti Suzuki India, Mahindra & Mahindra, and Hyundai lost ground due to volume declines.
In the two-wheeler segment, TVS Motor and Royal Enfield gained domestic volume market share, while Bajaj Auto and Hero MotoCorp likely lost share based on the analysis.
The report also highlights that BNP Paribas’s proprietary automotive commodity cost index remained flat month-on-month for both passenger vehicles and two-wheelers in July, with declining steel prices partially offset by rising base metal prices.
Vehicle loan growth increased year-on-year in July, while currency circulation growth improved during the same period, indicating supportive financial conditions for automotive demand.
The research suggests the divergent trends reflect strategic positioning by manufacturers, with two-wheeler companies preparing for seasonal demand while passenger vehicle makers adjust to regulatory changes and shifting consumer behavior patterns.
BNP Paribas maintains varied ratings across the automotive sector, with positive outlooks on several major manufacturers including Ashok Leyland, Mahindra & Mahindra, Maruti Suzuki, and Tata Motors, while maintaining neutral positions on others including Hero MotoCorp and Bajaj Auto.