Indian auto sales show mixed growth in January 2025, two-wheeler segment slows.

India's automotive sector reported mixed performance in January 2025, with passenger vehicle sales growing 3% while two-wheeler dispatches showed modest 1% growth year-over-year. The trend indicates a potential impact of weak financing on the two-wheeler segment, according to a BNP Paribas research report.

The medium and heavy commercial vehicle (MHCV) segment returned to growth with a 5% increase, while light commercial vehicles (LCV) recorded 2% growth. Tractor sales demonstrated strong performance with 9% growth, though performance varied among manufacturers.

Maruti Suzuki maintained its market leadership with total sales of 212,251 units, up 6.5% year-over-year, supported by 13% growth in exports. Mahindra & Mahindra's utility vehicle sales grew 17.6% to 50,659 units, while Tata Motors saw a 10% decline in domestic passenger vehicle sales to 48,056 units.

In the two-wheeler segment, TVS Motor posted 17.1% growth in total sales to 397,623 units, while Hero MotoCorp's domestic sales declined 2% to 412,378 units. Royal Enfield recorded 19.6% growth with total sales of 91,132 units.

The report notes that commodity costs moderated month-on-month for passenger vehicles and remained steady for two-wheelers in January. Diesel consumption rebounded, suggesting improved commercial vehicle fleet utilization, while freight rates remained stable after recent recovery.

BNP Paribas analysts suggest that while recent Union Budget measures could support demand, benefits may be more pronounced for entry-segment cars and premium motorcycles. The firm maintains varying outlooks for different manufacturers, with positive ratings for Ashok Leyland, Mahindra & Mahindra, Maruti Suzuki, and Tata Motors.

The auto sector's performance reflects broader economic indicators, with rural wages showing growth and consumer confidence improving according to RBI data. The industry continues to navigate challenges in financing and market demand across segments.