Auto Retail Sales Rise Nearly 8% In 2025; December Growth Accelerates To 15%

Auto retail sales in India closed 2025 on a strong note, supported by broad-based demand across vehicle categories, according to data revealed by Federation of Automobile Dealers Association. There was also a sharp year-end surge in December. Growth momentum was visible in passenger vehicles, commercial vehicles, two-wheelers and tractors, underscoring a steady recovery in consumption and investment-led demand.

For the full year 2025, total auto retail sales grew 7.7% year-on-year to 2.8 crore units. Two-wheelers continued to dominate volumes, with sales rising 7.2% to 2.03 crore units, reflecting improving rural demand and stable financing conditions. Three-wheeler sales also increased 7.2% to 13.1 lakh units, aided by recovery in last-mile mobility and e-commerce-linked demand.

Passenger vehicle sales grew at a faster pace, rising 9.7% year-on-year to 44.75 lakh units. The segment benefited from sustained demand for SUVs, new model launches and improved supply conditions. Commercial vehicle sales expanded 6.7% to 10.1 lakh units, supported by infrastructure spending, logistics activity and replacement demand, though growth remained relatively moderate compared with other segments.

Tractor sales stood out in 2025, rising 11.5% year-on-year to 9.96 lakh units. The strong performance was driven by healthy farm incomes, favourable crop prices and better rural liquidity, positioning tractors as one of the best-performing auto segments during the year.

"The year, however, was a tale of two halves—Jan to Aug 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," said FADA President Mr. C S Vigneshwar.

December 2025 saw a sharp acceleration in retail sales, with total auto sales jumping 14.6% year-on-year to 20.3 lakh units. Passenger vehicles led the rally, posting a robust 26.6% growth to 3.8 lakh units, helped by festive demand spillover, year-end offers and improved availability.

Commercial vehicles also recorded strong growth, with sales rising 24.6% year-on-year to 83,666 units, reflecting steady freight movement and continued government-led infrastructure activity. Three-wheeler sales surged 36% to 1.3 lakh units, highlighting renewed strength in urban and semi-urban mobility.

Two-wheeler sales, while relatively more mature, still grew a healthy 9.5% year-on-year to 13.2 lakh units in December, supported by improved rural sentiment and seasonal demand.