Three-Wheeler Retail Sales Momentum Falters in March 2025

Three-wheeler retail sales experienced a notable setback in March 2025, registering a 5.67% year-over-year decline with 99,376 units sold compared to 105,352 units in March 2024, according to data released by the Federation of Automobile Dealers Associations (FADA). This March contraction marks a worrying end to what was otherwise a positive fiscal year for the segment.

Despite the disappointing March figures, the three-wheeler segment closed FY2025 with a healthy 4.54% growth compared to the previous fiscal year, underscoring the resilience of this critical last-mile connectivity and goods transportation sector in India's urban and rural landscapes.

The monthly growth data for three-wheelers reveals a concerning downward trend in the latter half of FY2025, with three consecutive months of weakening performance from January to March. After reaching a high of 20.09% growth in May 2024, the segment has shown gradually diminishing returns, culminating in the 5.67% decline in March 2025.

"The three-wheeler segment experienced a concerning 5.67% YoY decline in March, despite showing a modest 5.52% month-on-month improvement over February," said Mr. C.S. Vigneshwar, FADA President. "This negative trend in the last quarter of FY2025 demands attention, especially given the segment's importance for urban and rural connectivity and livelihood generation."

Subsegment Performance

A deeper analysis of the three-wheeler category reveals varying performances across its subsegments. E-rickshaw passenger carriers continued their struggle with a 3.38% YoY decline in March, while goods carriers showed strength with a 41.77% YoY growth, highlighting the robust demand in the last-mile goods delivery space.

The passenger carrier segment, traditionally the largest within three-wheelers, registered a concerning 6.93% YoY decline, reflecting challenges in the urban mobility space potentially driven by competition from ride-hailing services and expanding metro networks in major cities.

"The goods carrier segment's growth indicates the strong momentum in e-commerce and quick commerce deliveries," noted Vigneshwar. "However, the passenger carrier segment's contraction is concerning and points to structural shifts in urban mobility preferences."

Electrification Leading the Transformation

The three-wheeler segment continues to lead India's EV transformation, with electric vehicles accounting for an impressive 59.9% of total three-wheeler sales in March 2025. This represents a growth from 57.7% penetration in March 2024. For the full fiscal year, EV penetration in the three-wheeler segment reached 57.3%, up from 54.2% in FY2024.

"The three-wheeler segment is at the forefront of India's electric mobility revolution," emphasized Vigneshwar. "The economic advantages of electric three-wheelers in terms of lower operational costs, coupled with supportive government policies, have accelerated this transition."

Market Leader Dynamics

Bajaj Auto maintained its dominant position with a 34.05% market share in March 2025, though this represented a slight decrease from 34.81% in March 2024. Mahindra Group (including Mahindra Last Mile Mobility) held the second position with a combined 7.40% share, showing stability from the previous year.

Notably, Piaggio Vehicles saw its market share decline to 7.11% from 8.98% a year earlier, while TVS Motor Company grew significantly to 2.97% from 1.72%, indicating shifting competitive dynamics in the segment.

Rural-Urban Divide

The three-wheeler segment showed a distinct rural advantage throughout FY2025, with rural sales growing by 8.70% compared to just 0.28% growth in urban areas. This rural strength continued even in March, with rural areas showing a less severe decline (-4.84%) compared to urban regions (-6.53%).

"Rural India's acceptance of three-wheelers as an affordable and practical transportation solution continues to grow," explained Vigneshwar. "The expansion of rural infrastructure and last-mile connectivity needs have created a sustained demand for this segment in non-urban markets."

Future Outlook

Looking ahead to FY2026, FADA anticipates modest growth for the three-wheeler segment, driven primarily by continued electrification and the expanding use cases for goods carriers. However, several challenges loom, including financing constraints, particularly for individual buyers, and potential regulatory changes in major urban markets.

"The passenger carrier segment's revival will be crucial for overall three-wheeler growth in FY2026," Vigneshwar noted. "We're also closely watching how ride-hailing platforms integrate three-wheelers into their offerings, as this could significantly impact demand patterns."

The segment is also witnessing new entrants, particularly in the electric space, which could intensify competition and drive innovation. Traditional players are responding with new models featuring improved technology, comfort, and range, especially in the electric segment.

The three-wheeler sector's performance in March ends FY2025 on a challenging note, but the overall annual growth provides reason for cautious optimism. As a segment that serves both economic and transportation needs, particularly for lower and middle-income groups, its health remains an important indicator of grassroots economic activity across urban and rural India.