Sedans And Hatchbacks Fight Back As Passenger Car Sales Show A New Balance: SIAM
Industry executives attributed the surge to improved affordability post-GST cuts, personal income tax relief, and successive repo rate reductions by the RBI.
India’s passenger vehicle industry delivered its best-ever quarterly and calendar-year performance in the third quarter of the fiscal, signaling a strong recovery in consumer demand supported by policy measures, improved affordability, and festive buying momentum.
According to the Society of Indian Automobile Manufacturers, PV domestic wholesales in October–December 2025 surged to an all-time high of 1,276,073 units, up 20.6% year-on-year. This made the December quarter the highest-selling quarter ever for the segment, driven by robust demand across utility vehicles, passenger cars, and vans during the festive season.
The strong Q3 performance also pushed calendar-year volumes to a new peak. PV dispatches during January–December 2025 stood at 4,490,000 units, up 5% annually, with this quarter contributing a disproportionately large share. Utility vehicles remained the primary growth engine, while passenger cars saw a sharp revival on improved financing conditions.
Utility vehicles (UVs) continued to dominate growth. UV sales in Q3 rose 20.9% to 852,498 units, slightly ahead of passenger cars. Passenger cars recorded 20.5% growth in Q3 to 381,226 units, aided by GST rate cuts and lower financing costs. Cars accounted for nearly one-third of Q3 PV sales, benefiting from the GST 2.0 rebound.
On a calendar-year basis, passenger car volumes were almost flat, growing just 0.6% in 2025, highlighting the structural shift toward UVs. In contrast, UV sales grew 7.4%, reinforcing their role as the backbone of PV growth. UVs accounted for 65% of overall PV sales in 2025.
Industry executives attributed the surge to improved affordability post-GST cuts, personal income tax relief, and successive repo rate reductions by the RBI, which lowered financing costs and boosted discretionary spending. Festive optimism further drove showroom footfalls and conversions.
Exports added strength to the PV story. PV exports in Q3 FY2025-26 hit a record 225,046 units, up 11.7% YoY. For the full year, exports climbed to 863,000 units, up 16.0% from 2024, with steady demand from the Middle East, Africa, and Latin America.
Other segments also grew strongly. Two-wheeler domestic sales in Q3 rose to 5,696,238 units, up 16.9% YoY, driven by scooters and recovering entry-level motorcycles. Motorcycle sales grew 12.0% to 3,399,378 units, aided by rural cash flow improvements, though lagging scooters. For the year, motorcycle sales rose just 1.1% to 12,482,990 units, while scooters posted double-digit growth on urban demand and premiumization.
Three-wheelers saw 14.0% growth in Q3 to 215,211 units, supported by passenger carrier demand and last-mile mobility. Commercial vehicles also posted double-digit growth, driven by infrastructure and freight activity.
Looking ahead, Q4 is expected to remain strong due to year-end purchases, replacement demand, and infrastructure spending. OEMs will likely push retail schemes to close FY2025-26 on a high note. Risks remain around commodity prices, global volatility, and supply chain challenges.
