The month of February witnessed a strong growth restricted to tractor exports supporting performance across segments, wherein, Mahindra Tractor led the sales charge. In the commercial vehicle segment, Eicher outperformed while Tata Motors remained sluggish. In the three-wheeler segment, Atul spearheaded while Bajaj remained sluggish.

2-wheelers: Scooters and Exports Racing Ahead while Motorcycles take a Backseat

Hero MotoCorp reported a steep decline in domestic sales in the month, impacted by the motorcycle segment. The performance was significantly underwhelming, against an estimate of a flattish YoY performance. The scooters segment saw good growth, for the 2nd consecutive month. Exports performance continued to be strong.

TVS Motors’ 2W sales performance was slightly lower than anticipated, but remained healthy with a near double-digit YoY growth of 9.5%. Growth continued to be led by the scooters segment and in export markets. Growth in the motorcycle segment deteriorated to mid-single digit level from double digit growth seen on a YTD basis till Jan-25. Retail sales growth on a YoY basis continued to be marginally positive in February.

Bajaj Auto’s 2W sales disappointed vs. our estimate, impacted by a 14.3% YoY decline in the domestic 2W segment. Domestic retail sales as per VAHAN have seen YoY and MoM declines in February across most players. Exports reported a growth of 23.5% YoY, continuing its strong traction.

Royal Enfield sales for the month continued to be on a very strong footing, and were ~3.8% higher than estimated. In terms of retail sales, RE was among the few 2W players to see a YoY growth during the month, but saw a double-digit MoM dip. Strong growth was seen across domestic and exports and across product segments.

Key Insights:

• Hero MotoCorp saw a 17.2% YoY decline, primarily due to weak motorcycle sales.

• TVS Motors reported 9.5% YoY growth, driven by scooters and exports.

• Bajaj Auto saw 1.6% YoY growth, with exports offsetting domestic weakness.

• Royal Enfield (Eicher Motors) outperformed with 19.4% YoY growth, supported by strong domestic and export demand.

Passenger Vehicles: Segment Continues its Muted Performance

Maruti Suzuki’s sales growth deteriorated to a minor 1% YoY in the month, after seeing a strong run for the previous 3 months. PV sales were flat YoY while LCV sales declined during the month. Exports decline of 13.5% was a big drop after seeing strong double-digit growth on a YTD basis. The overall sales were a miss vs. our estimate, disappointing by ~4.8%.

Tata Motors PV reported a steeper than expected decline in sales in the month at -8.8% YoY. Sales were 4% lower than estimated. The performance deteriorated after seeing a decent uptick

in January 2025. The company has been the underperformer in the PV pack on a YTD basis.

M&M PV has continued to deliver the strongest performance within the PV industry, driven by their all-SUV portfolio. At the retail level, there has been a YoY decline in sales volumes in the month, albeit at a lower rate than overall PV industry.

Hyundai Motor India continued to see good export traction, while domestic business continued to underwhelm.

Key Insights:

• Maruti Suzuki reported 1% YoY growth, but exports declined 13.5%.

• Tata Motors' PV sales fell 8.8% YoY, underperforming expectations.

• Mahindra & Mahindra (M&M) led the segment with 18.9% YoY growth, driven by SUVs.

• Hyundai saw a 2.9% YoY decline, impacted by weak domestic sales.

Commercial Vehicles: No Respite in Sight for the Segment Yet

Tata Motors’ CV sales saw a high single digit YoY decline vs an expectation of a low single digit decline. The previous 4 months had also seen a low single digit decline. In terms of retail registrations, the company has seen the steepest decline in the month. On a YTD- basis, Tata Motors CV has underperformed the industry.

M&M reported a decent 4.4% YoY growth in CV sales, supported by flattish retail sales for the month. On a YTD-FY25 basis, M&M has gained market share in the LCV <3.5T segment.

Ashok Leyland saw a muted growth of 1.5% in the month of February, lower than our estimate by ~5%. This was a pullback in growth after the mid/high single-digit performance seen for the previous two months. Exports continued to shine, doubling YoY. Domestic performance reverted to the red, after 2 months of respite. Retail sales in the month were also negative for AL and other key players, indicating there is no demand revival in the broader CV industry.

VECV’s performance for the month was largely in-line with our estimate with a strong 9.0% YoY growth. Exports growth continued to surpass domestic growth.

Key Insights:

• Tata Motors' CV segment declined 7.3% YoY, with weak retail demand.

• M&M CV sales grew 4.4% YoY, supported by steady LCV demand.

• Ashok Leyland’s growth remained muted at 1.5% YoY, with exports outperforming.

• VECV posted 9.0% YoY growth, mainly due to export demand.

3-wheelers: Growth for the Market Leader Lags behind Other Players

Bajaj Auto continued to see a low-single digit YoY growth in domestic 3W. Exports, which were seeing strong double-digit growth till the previous month, were impacted due to base normalization.

TVS Motors’ 3W sales has seen a good MoM uptick in February, leading to a strong YoY performance.

M&M 3W sales growth of 3.8% YoY was lower than the YTD growth seen during the year. This moderation is after an exceptionally high growth seen in January 2025.

Atul Auto continued its strong momentum with double-digit growth, led by exports growth and low double-digit growth in domestic sales as well.

Key Insights:

• Bajaj Auto’s 3W segment grew 1.3% YoY, but exports slowed.
• TVS Motors saw a 13.9% YoY rise, supported by domestic demand.
• Atul Auto was the top performer with 26.1% YoY growth, led by exports.

Tractors: Segment Shines due to Positive Rabi Crop Outlook

M&M farm equipment business continues to benefit in the domestic market, with a strong market leading growth of 18.7% YoY. Favourable weather patterns, positive Rabi outlook and  Government support to farmers are key triggers for continued growth. Export growth traction has toned down due to base normalization from February. Escorts Kubota has seen low-double digit growth as the base turns favourable now with muted performance Feb-24 onwards. Exports has been on a strong footing for 3 months now.

Key Insights

• M&M led the market with 17.8% YoY growth, supported by a strong Rabi crop outlook.

• Escorts recorded 11.4% YoY growth, benefiting from an improved demand environment.

Key Takeaways

• The two-wheeler segment had mixed results, with scooters and exports performing well.

• Passenger vehicle sales remained weak overall, except for M&M’s strong SUV-driven growth.

• Commercial vehicle demand remains sluggish, with no clear signs of recovery.

• Tractors continue to be a bright spot, benefiting from favorable market conditions.