What Are The Best Auto Stocks For Long Term in June 2025?

India’s automobile industry stands at a crucial turning point, backed by macroeconomic drivers, rising consumer aspirations, and a policy push towards electric mobility. For long-term investors, this sector can offer compelling opportunities, especially in stocks with fundamentals and historical returns. Here are some of the best auto stocks based on the 5-year CAGR.

Best Auto Stocks for Long-Term – Based on 5yr CAGR (June 2025)

Note: The best auto stocks for long-term listed here are as of June 4, 2025. The stocks are sorted based on the 5yr CAGR.

India’s Auto Industry: A Growth Powerhouse

The Indian automobile sector has historically mirrored the health of the economy. Rising middle-class income and a youth-heavy demographic are key demand drivers. In December 2024, total production across passenger vehicles, two-wheelers, three-wheelers, and quadricycles stood at 19.2 lakh units, underlining strong ongoing momentum.

India is not just a domestic leader, it’s a global heavyweight. It is the largest tractor producer, the second-largest bus manufacturer, and the third-largest heavy truck manufacturer globally. In FY23, India produced 25.9 million vehicles, while FY25 (April–September) alone saw 15.6 million units produced, highlighting consistent demand recovery.

Electrification: A Game-Changing Trend

Electrification is reshaping the future of mobility. India saw a landmark sale of 1,00,000 EVs in CY24, up from 82,688 in CY23. This growth is just the beginning. According to the CEEW Centre for Energy Finance, India’s EV industry holds a US$ 206 billion opportunity by 2030, requiring US$ 180 billion in investments.

Globally, the EV market is projected to expand from US$ 250 billion in 2021 to US$ 1,318 billion by 2028. India is expected to contribute significantly to this shift, especially through affordable electric two-wheelers, three-wheelers, and small passenger vehicles. Government support, along with the rise of public charging infrastructure, is further accelerating the transition.

Are Auto Stocks a Long-Term Bet?

The two-wheeler and passenger car segments alone accounted for over 96% of market share in FY25, indicating the dominance of personal mobility solutions. Additionally, rising demand for commercial vehicles, driven by logistics and transportation sector growth, is strengthening the overall industry outlook.

As rural markets open up and urban consumers shift toward premium and electric options, companies with a broad product portfolio, strong balance sheets, and aggressive EV strategies are well-positioned to lead the next growth cycle.

Also Read: May 2025 Auto Sales: Tata Motors, Maruti Suzuki, M&M Shares in Focus!

Conclusion

Whether it’s value investing in a stock like Tata Motors or capturing high-growth stories like Force Motors and TVS, India’s auto sector offers a range of investment opportunities. With supportive government policies, global-scale production capacity, and rapid electrification, auto stocks can offer opportunities.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.