May 2025: MayDay For Passenger Vehicles Geopolitical uncertainties and unseasonal rains impacted the automobile market, while passenger vehicle overall struggled, EVs showed improvement
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The month of May has been challenging for the passenger vehicle market. However, electric vehicles (EVs) have shown promising returns. Country's largest car maker Maruti's domestic passenger vehicle sales (excluding sales to other OEMs) dropped to 135,962 units in May 2025, down from 144,002 units in May 2024, a 5.6 percent year-on-year (YoY) decline. Similarly, Tata Motors' passenger vehicle division recorded 42,040 units in May 2025, down 11 percent from 47,075 units in May 2024. The company's domestic PV sales declined to 41,557 units, reflecting market uncertainties. Hyundai Motor India Ltd (HMIL) recorded a total sales volume of 58,701 units in May 2025, including domestic sales of 43,861 units.
The only winner in the month of May was Mahindra's passenger vehicle business which delivered 52,431 units, achieving 21 percent growth. Nalinikanth Gollagunta, CEO, Automotive Division, M&M Ltd, said, "In May, we achieved SUV sales of 52,431 units, a growth of 21 percent, and total vehicle sales of 84,110 units, a 17 percent growth compared to the same month last year. Thanks to continued demand for our products, we were able to deliver industry-leading growth across our ICE and BEV portfolio."
"In May 2025, dispatches to dealers were 3.5 lakh units, which is almost one percent lower than last year. But the concerning part is the retail sales as it stood at 3 lakh units, it is almost 4 percent lower compared to the retail sales of May 2024. Geopolitical uncertainties and unseasonal rains have impacted the market and hence retail sales dropped," said Arun Malhotra, auto industry expert and former MD of Nissan Motor in a social media post.
Maruti Suzuki's retail car sales decreased 3.35 percent to 1.17 lakh units in May 2025 compared with 1.20 lakh units in May 2024. This is not standalone, retail sales of Tata Motors declined 7 percent YoY to 38,461 units in May 2025 compared with 41,550 units in May 2024. Hyundai Motor India's retail sales declined 14.45 percent YoY to 38,026 units in May 2025, compared with 44,456 units in May 2024. Kia India too saw a 11 percent drop in retail sales in May 2025. Only Mahindra & Mahindra (M&M), witnessed a 25 percent increase in retail sales from 33,024 units in May 2024 to 41,332 units in May 2025.
As far as EVs are concerned it's a bright spot, "Passenger vehicle EVs have grown to almost 12 and a half thousands in the month of May. For the first time ever, penetration of EVs in the passenger vehicle segment has grown to 4 percent. Earlier the percentage was between 2 to 2.8 percent. This positive trend is due to competent players in the market," Malhotra added.
In May, electric car sales grew by over 50 percent to 12,197 units. Tata Motor's EV total sales in both domestic and International business stood at 5,685 units, 2 percent upward from 5,558 units sold in May 2024. M&M posted a 338 percent YoY jump in May 2025, registering 2,604 units, up from 594 units a year ago, according to data from Vahan. Similarly, MG Motor delivered 3,732 EVs in May, a 147 percent increase over the same month last year.
Another challenging aspect is CAFE, or Corporate Average Fuel Efficiency, norms in India. These are regulations that set standards for the average fuel efficiency of passenger vehicles sold by car manufacturers. These norms aim to improve fuel efficiency and reduce carbon emissions. They apply to all vehicles sold by a manufacturer in a fiscal year. Government wants companies to abide by these norms in order to cut emission by 30 percent. But this is not without hurdles. "Companies which dont fall into the norms will have to pay heavy penalty and fnes. To meet CAFE norms a lot of investment is needed by the companie, so prices of vehicles might go up. However, CAFE 3 norms have been hanging for almost three months now, so something should work out. I believe government needs to take more pragmatic approach to it, otherwise, passenger vehicle industry which is struggling, might face furher challenges," Malhotra explained.
