Maruti Suzuki’s May Sales Signals Broader Slowdown

Maruti Suzuki’s May 2025 sales figures have dampened hopes of a revival in the entry level car segment, set off by strong sales of hatchbacks in April, with even the previously resilient SUV segment showing signs of strain. 

Maruti’s domestic passenger vehicle sales (excluding sales to other OEMs) declined to 135,962 units in May 2025, down from 144,002 units in May 2024—a 5.6% year-on-year drop. This represents a reversal from April 2025, when domestic PV sales had shown positive growth at 138,704 units compared to 137,952 units in April 2024, up 0.5% year-on-year. Maruti had benefited from growth in its two key segments, UVs and compact cars (such as Wagon R and Swift) in April, but both failed to deliver the boost in May.

SUV Segment Shows Growth Moderation

Maruti’s utility vehicle segment, while maintaining year-on-year growth, also demonstrated some softening in May. UV sales reached 54,899 units, representing a modest 1.3% increase over May 2024’s 54,204 units. However, this came after a stronger April performance of 59,022 units, indicating a 7% month-on-month decline.

The year-on-year growth of 1.3% represents a significant moderation from the robust double-digit growth rates that characterized the SUV segment through 2022-2024. This deceleration is notable given that utility vehicles have been the primary growth engine for the Indian automotive industry in recent years.

SUV sales continue to grow for other OEMs, but at a reduced pace, suggesting that the segment may be entering a more mature phase, with growth rates normalizing after years of exceptional expansion.

Entry-Level Recovery Proves Short-Lived

The May performance in Maruti’s core segments reveals a disappointing reversal of April’s encouraging year-on-year trends. In April 2025, while the mini segment (Alto and S-Presso) continued to slide with a 45% year-on-year decline (6,332 units vs 11,519 units in April 2024), the compact segment—which is critical for the company—was in positive territory with 8.2% year-on-year growth (61,591 units vs 56,953 units in April 2024).

These April numbers had rekindled hopes among industry observers that the worst might be behind the entry-level segments, suggesting that consumer demand for affordable vehicles was beginning to stabilize after months of sustained pressure.

However, May’s performance indicates such conclusions were premature. The mini segment deteriorated significantly, with the year-on-year decline widening to -31.6% (6,776 units vs 9,902 units in May 2024). More concerning, the compact segment—which had shown promising 8.2% growth in April—swung back into negative territory with a -9.8% decline (61,502 units vs 68,206 units in May 2024).

Combined, these entry-level segments declined 12.6% year-on-year in May, representing a monthly volume reduction of nearly 10,000 units compared to the previous year and erasing the optimism generated by April’s relatively better performance.

This volatility is particularly significant as these segments traditionally serve as the entry point for first-time car buyers and represent the largest addressable market in India. The April-May contrast suggests that underlying demand challenges in the entry-level market remain unresolved, with April’s improvement proving to be an aberration rather than a sustainable trend.

Toyota Partnership Provides Silver Lining

One bright spot in Maruti’s performance has been its sales to other OEMs, primarily Toyota, which generated 10,168 units in May compared to 10,490 units in April. This represents the OEM supply business that has grown significantly as Toyota leverages Maruti’s manufacturing capabilities for models like the Urban Cruiser and Glanza.

The OEM channel has shown remarkable resilience, with year-to-date volumes of 19,995 units representing a 25.2% increase over the previous year’s 15,971 units. This partnership has become increasingly important as it provides Maruti with additional volume amid declining domestic retail demand.

Competitive Landscape Shows Mixed Performance

A comparison with other major players reveals varied performance across the industry, suggesting differentiated market positioning strategies:

Hyundai Motor India reported total sales of 58,701 units in May 2025, comprising 43,861 domestic units and 14,840 export units. The company attributed some impact to scheduled maintenance shutdowns while noting ongoing market dynamics.

Tata Motors’ passenger vehicle division recorded 42,040 units in May 2025, down 11% from 47,075 units in May 2024. The company’s domestic PV sales declined to 41,557 units, reflecting similar market pressures.

Mahindra’s passenger vehicle business delivered 52,431 units, achieving notable 21% growth. This performance highlights the potential for focused SUV strategies, though it represents a smaller overall volume base compared to other players.

The divergent performance among major players is reshaping market dynamics. While Maruti maintains its dominance with approximately 42% market share according to recent industry data, its volume declines in key segments create opportunities for competitors.

Mahindra’s strong SUV performance, Tata’s electric vehicle push, and Hyundai’s premium positioning suggest a potential fragmentation of the market as consumer preferences evolve and economic pressures mount.

Economic Factors Influencing Demand

The automotive market adjustment reflects broader economic considerations affecting Indian consumers. High GST rates ranging from 28% to 50% on vehicles, coupled with additional state taxes and registration fees, continue to impact vehicle affordability for middle-class buyers.

Additionally, evolving employment patterns among India’s youth—traditionally a key demographic for entry-level vehicles—have influenced car purchasing decisions. The segment that previously drove volume growth is now demonstrating increased price sensitivity and extended purchase consideration periods.

Export Bright Spot Amid Domestic Gloom

Maruti’s export performance provided some consolation, with overseas shipments reaching 31,219 units in May 2025, compared to 17,367 units in the previous year—an impressive 80% increase. This “Make in India, Made for the World” success story offers hope but cannot fully compensate for domestic market weakness.

The May 2025 numbers suggest that India’s automotive industry is navigating a transitional phase where market dynamics are evolving across segments. The moderation in SUV growth, combined with ongoing adjustments in entry-level segments, indicates the industry is adapting to changing consumer preferences and economic conditions.

For Maruti Suzuki, the market leader’s performance in the coming quarters will provide important insights into whether current trends represent a cyclical adjustment or indicate longer-term structural changes. The company’s strategic responses and market positioning will serve as valuable indicators of industry adaptation strategies.

The broader implications extend to India’s manufacturing and economic landscape, as the automotive sector represents a significant component of industrial activity and consumer spending patterns. Industry stakeholders are likely monitoring these trends closely to inform future investment and policy decisions.

 

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