More Stories

Informist, Monday, Jun. 30, 2025

 

By Anand JC

 

NEW DELHI – Wholesale sales of two-wheelers and tractors in June are likely to have increased year-on-year but growth in passenger vehicle and commercial vehicle despatches could contract due to subdued demand, analysts said. Companies will disclose automobile sales data for June from Tuesday.

 

Two-wheeler sales, which form the bulk of automobile units sold in India, likely grew 3% on year in June, analysts at Nomura Global Markets Research said in a note Monday. This would be driven by 3% on-year growth in Bajaj Auto Ltd.'s auto despatches, 18% on-year growth in Eicher Motors Ltd.'s Royal Enfield sales, 11% growth in Hero MotoCorp Ltd. sales, and 24% on-year growth in sales of TVS Motor Co. Ltd.

 

Analysts at Nuvama Institutional Equities have forecast a 7% on-year increase in domestic two-wheeler despatches in June. "Two-wheeler industry volumes to grow in high single-digit owing to positive rural customer sentiment and marriage season demand," the firm said in a research report Monday. They expect export volumes of two-wheelers to increase in double digits, driven by growth in Latin America and Africa despatches. 

 

While demand for two-wheelers remains a bright spot, the passenger vehicle industry is likely to have struggled in June. Nomura and Nuvama expect wholesale volumes of the passenger vehicle industry to contract 5% on year in June. Feedback from dealers suggested that demand for this segment remained subdued with no signs of a pickup yet, as inventory build-up continues amid fewer new launches. 

 

Amid subdued demand and higher inventory, companies like Hyundai Motor India Ltd., Mahindra and Mahindra Ltd., and Tata Motors Ltd. have increased discounts on their passenger vehicles, Nuvama said, adding that the discounts offered by Maruti Suzuki India Ltd. are lower.

 

As per Nomura, while domestic passenger vehicle sales of Maruti Suzuki likely fell 13% on year, M&M's sales grew 20% on year with continued support from a production ramp-up for its electric cars BE6 and XEV 9e. Domestic despatches of Tata Motors and Hyundai Motor are likely to have fallen 8% and 14% in June, Nomura said.

 

Nomura expects wholesale sales of commercial vehicles to contract 1% on year, but Nuvama expects a sharper 4% on-year contraction. In June, retail sales of medium and heavy commercial vehicles increased 4% on year, driven by a 7% on-month increase in freight rates. According to Nuvama, e-way bill generation in June was higher on year, which indicates better freight availability for transporters. However, selective financing by lenders, inventory stocking in May before the mandatory air-conditioned cabin norm was implemented, and reasonable levels of fleet utilisation restricted despatches, Nuvama said. 

 

Wholesale sales of Ashok Leyland Ltd.'s commercial vehicles likely grew 1.7% on year, according to Nomura. The firm said wholesale sales of commercial vehicles by Eicher Motors' joint venture VE Commercial Vehicles are likely to have increased 4.4% on year, while Tata Motors' despatches fell 4% on year.

 

Apart from two-wheelers, tractors are expected to be the other positive for the automobile industry. Nomura and Nuvama have forecast 6% and 7% growth in domestic tractor despatches in June. Sentiment of Indian farmers remains upbeat due to the forecast of a favourable monsoon season. Further, positive factors such as good reservoir levels and improvement in crop prices continue to support demand, Nomura said.

 

Nuvama expects tractor despatches of M&M to have grown 7% on year in June, while those of Escorts Kubota Ltd. are expected to have increased 2%.

 

OUTLOOK

Recently, curbs on exports of rare earths by China have emerged as a major headwind for global auto companies. Indian companies have not been spared from these worries either. Analysts note that no Indian supplier has been able to secure approvals from the Chinese government for supply of rare earth magnets.

 

Companies have recalibrated their production plans, given the shortage of this key raw material. While these rare earth magnets play a very significant role in manufacturing electric vehicles, they are also used in internal combustion engine vehicles. They are used in e-axle, brake and wheel sensors, steering assembly, speedometer, and speakers, among other components.

 

Given their ubiquitous presence across various fuel-run vehicles, Nomura expects petrol, diesel, and compressed natural gas-run vehicles to face some impact from July. Production of electric two-wheelers is expected to be impacted from July.  End

 

Edited by Nishant Maher

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.