Automobile retail sales in CY25 grew 7.71% year-on-year (YoY) with total sales of over 2.81 crore vehicles according to data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday (January 6, 2026).

FADA president C.S. Vigneshwar said: “India’s auto retail delivered a confident close, with total retails at 2,81,61,228 units, registering a 7.71% YoY growth. The year, however, was a tale of two halves — January to August remained subdued despite supportive macro cues such as direct tax relief in the Union Budget and RBI’s cumulative rate easing through 2025. During this phase, customers stayed value-conscious and financier approvals remained selective in pockets, resulting in uneven conversions across markets.”

“The turning point came from September onwards, when the landmark GST 2.0 rate rationalisation — including meaningful reductions for mass segments like small cars, two-wheelers (up to 350 cc), three-wheelers and key commercial categories — improved affordability and lifted sentiment, leading to a clear upshift through September to December,” he said.

Category-wise, two-wheelers (2W) grew 7.24%, passenger vehicles (PV) rose 9.70%, commercial vehicles (CV) expanded 6.71%, and tractors posted 11.52% growth.

“Importantly, the year saw broad-based participation — urban retail grew 8.20% and rural 7.31% — and within PVs, rural demand was a standout, growing 12.31% versus 8.08% in urban markets, underlining the strengthening spread of personal mobility beyond metros,” Mr. Vigneshwar said.

CY’25 also reinforced the transition underway — EV share moved up in 2W, PV, CV and remained dominant in 3W, while CNG strengthened its presence in PV and CV, signalling a more diversified mobility mix, he said.

“Overall, CY’25 closes on a celebratory note—stronger demand visibility, healthier enquiry pipelines and a more confident consumer, as we step into 2026,” he added.

December proved to be a strong finish to the calendar year for auto retail. The industry retailed 20,28,821 vehicles, posting a healthy 14.63% YoY growth.

“The month clearly benefited from the continued positive sentiment post GST 2.0, year-end offers, and a fair amount of pre-buying ahead of expected price revisions in January, helping dealers convert enquiries and spillover bookings in a time-bound manner,” Mr. Vigneshwar said.

In two-wheelers, retail was up 9.50% YoY. While demand stayed steady, the month was also shaped by select supply constraints and model-wise availability, with many customers advancing their purchase decisions due to impending price increases.

“It is encouraging to see the transition continue — EV share in 2W improved to 7.40% (vs. 6.13% last year), reflecting rising acceptance, especially in urban markets where growth remained stronger than rural on the back of better liquidity flow,” he added.

Commercial vehicles reported 24.60% YoY growth. The momentum was led by underlying economic activity, improved goods movement and sustained demand in the load segment, with medium commercial vehicle (MCV) growth particularly strong and LCVs/HCVs also reporting healthy expansion.

“Passenger carrier demand remained supportive as well. That said, we continue to flag financing turnaround time and approval selectivity as a friction point in parts of the market — something that needs sharper focus to sustain momentum,” the FADA president said.

Passenger vehicles continued their positive run, up 26.64% YoY, with rural PV growth at 32.40% outpacing urban growth — an important indicator of widening mobility demand beyond metros, according to FADA.

Dealers also used December to liquidate Model Year (MY) 2025 stocks on the back of attractive schemes and better model mix availability. Inventory for PVs is currently around 37-39 days, which reduced by around 7 days from previous month, it said.

The fuel mix also underlines the shift underway — CNG is now 21% of PV retail and EV is 4%, signalling a steadily diversifying customer preference, it added.

Published – January 06, 2026 05:06 pm IST

After an almost quiet September for first 21 days due to the GST 2.0 transition, October witnessed a swift rebound. File.
| Photo Credit: Reuters