July 2025 India auto sales: Everything you need to know
July 2025 marked a pivotal month in the Indian automobile sector. Mahindra & Mahindra posted a remarkable 20% year-on-year surge in SUV sales, continuing its dominant growth trajectory. Meanwhile, electric vehicle production—especially scooters like Bajaj Chetak and GoGo—is under threat due to a rare earth magnet shortage triggered by export restrictions from China. The contrasting stories underscore a key shift in market demand and supply chain vulnerabilities.
Mahindra’s SUV Momentum Continues
1. Mahindra’s SUV sales to dealers in July 2025 rose 20% YoY, powered by new model launches and deliveries of electric SUVs — outperforming rivals like Hyundai and Tata Motors .
2. In June 2025, Mahindra posted SUV sales of 47,306 units, an 18% YoY increase, contributing to overall auto sales of 78,969 vehicles (14% YoY growth).
3. For the full FY2025, the company clocked a record 551,487 SUV sales, reflecting a solid 20% YoY growth over the previous fiscal .
4. Diesel models continue to drive demand with a 77% share of Mahindra’s SUV sales in FY2025, while EVs remain a small fraction (2.3%) .
5. For instant updates you can use their Official Website: https://www.mahindra.com/
Implications:
Mahindra’s surge is supported by high-margin SUV demand, rural market strength, and new EV rollouts like the XEV 9e and BE 6. This performance also helped lift Q1 FY2026 profits, with SUV volumes up 22% YoY and net profit surging 34% to ₹34.5 billion .
EV Production Under Pressure: The Rare Earth Magnet Crisis
1. The supply of rare earth magnets, essential for EV motors, has been disrupted due to export curbs imposed by China, which dominates global production of these materials .
2. Bajaj Auto, a leading EV scooter manufacturer with models like Chetak and GoGo, has warned of a potential “zero production” month in August due to stock depletion and lack of new magnet shipments.
3. In July, EV output was already halved due to low inventory, and no clear resolution from Chinese authorities is in sight despite over 30 import clearance applications submitted .
4. SBI economists have flagged risks across sectors, noting that the rare earth ban could disrupt transport equipment, EV manufacturing, electronics, and more .
Impact on Indian EV market:
1. Disruptions may slow adoption of affordable EV scooters right when demand is rising—particularly ahead of festive demand.
2. Without local magnet production or alternative suppliers, companies face production halts and cost escalations. Some firms (e.g., Tata Motors) have already reduced magnet usage and explored alternatives .
3. The crisis exposes the fragility of India’s EV supply chain and underlines the urgent need for domestic rare earth capabilities.
Comparing Contrasts: SUV Surge vs EV Slowdown
1. Mahindra’s strength: robust SUV demand, model refreshes, strong rural and urban retail footprint, high-margin diesel models, and emerging EVs (e.g., XEV 9e, BE 6) gaining traction.
2. EV fragility: dependence on China for rare earth magnets has created supply side risk, halving Bajaj’s EV production in July and threatening a complete halt in August.
3. Market response: while SUVs continue to deliver growth and profits, EV segment faces uncertainty, especially in two-wheelers and light commercial vehicles.
Why Mahindra Is Winning
1. Product depth across price tiers—from compact SUVs to flagship models.
2. Diesel models remain key sellers in mass segments, even as rivals increasingly push petrol/EVs.
3. Emerging EV launches like Mahindra XEV 9e and BE 6 add future growth potential while haven’t yet faced supply constraints.
4. Dealer channels, finance schemes, and rural reach deliver volume and continuity even amid broader sector slowdown.
Long-Term Outlook and Strategic Risks
1. SUV dominance likely to continue—until EV production challenges are resolved, ICE-based platforms remain the growth engine.
2. EV segment volatility: If magnet restrictions persist, scooters and entry-level EVs are at risk of production bottlenecks and lost momentum.
3. India’s policy leverage: Government must accelerate rare earth production incentives, explore alternative suppliers, and encourage multilateral engagement to ensure supply resilience.
4. For OEMs: diversifying supply chain, reducing reliance on Chinese magnets, and building domestic R&D may become critical.
Summary | Key Takeaways
1. Mahindra achieved a 20% YoY increase in SUV sales in July 2025, reinforcing its leadership in utility vehicle space amid 14–18% growth across total volumes.
2. Bajaj Auto faces a rare earth magnet crisis, which has already halved EV production in July and may lead to a zero-output month in August for its Chetak scooter and GoGo three-wheeler models.
3. These diverging trends highlight the dual reality: strong SUV demand and rising sales versus fragile EV supply chains constrained by geopolitics.
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