India Auto Retail Grows 7.71% in CY2025; December Sees Strong 14.63% Surge, Says FADA

New Delhi: The Federation of Automobile Dealers Associations (FADA) on Tuesday released All-India Vehicle Retail Data for Calendar Year 2025 (CY’25) and December 2025, highlighting steady growth momentum across segments, supported by GST 2.0 reforms, improving rural demand, and rising consumer confidence.

CY’25 Auto Retail: 2.81 Crore Vehicles Sold, Growth Accelerates in Second Half

India’s auto retail industry closed CY’25 with total retail sales of 2,81,61,228 vehicles, registering a 7.71% year-on-year (YoY) growth, according to FADA.

FADA President Mr. C S Vigneshwar said CY’25 was a “year of two halves,” with subdued demand from January to August despite favourable macro conditions such as income tax relief and RBI rate easing. The turnaround came from September onwards, following GST 2.0 rate rationalisation, which significantly improved affordability in mass segments including small cars, two-wheelers (up to 350cc), three-wheelers, and key commercial vehicle categories.

Segment-Wise Performance in CY’25

• Two-Wheelers: +7.24%
• Passenger Vehicles (PV): +9.70%
• Commercial Vehicles (CV): +6.71%
• Tractors: +11.52%

Growth was broad-based, with urban retail rising 8.20% and rural retail growing 7.31%. Notably, rural PV demand surged 12.31%, outperforming urban growth of 8.08%, underlining deeper penetration of personal mobility beyond metros.

CY’25 also highlighted a diversifying fuel mix, with EV penetration increasing across two-wheelers, passenger vehicles and commercial vehicles, while CNG strengthened its presence in PV and CV segments.

December 2025: Auto Retail Rises 14.63% YoY

Auto retail in December 2025 stood at 20,28,821 units, marking a 14.63% YoY growth, making it a strong year-end finish for the industry. FADA attributed the growth to post-GST 2.0 sentiment, year-end offers, and pre-buying ahead of expected January price hikes.

December 2025 Segment Performance (YoY)

• Passenger Vehicles: +26.64%
• Commercial Vehicles: +24.60%
• Two-Wheelers: +9.50%
• Tractors: +15.80%

Rural demand once again outperformed urban markets, with rural PV growth at 32.40%, reflecting widening mobility aspirations across non-metro India.

PV inventory levels reduced to 37–39 days, down by around 7 days month-on-month, indicating healthier channel stock.

EV and CNG Adoption Gathers Pace

In December 2025:

• EV share in two-wheelers rose to 7.40%, up from 6.13% last year
• CNG accounted for ~21% of PV retail, while EV penetration reached ~4%

This trend reinforces India’s shift towards cleaner and diversified mobility solutions.

Near-Term Outlook: January 2026 and Beyond

Looking ahead, FADA’s dealer survey shows 70.48% of dealers expect growth in January 2026, with momentum likely to pick up in the second half of the month after Makar Sankranti and Pongal, supported by marriage season demand.

For the January–March 2026 (JFM’26) quarter, 74.91% of dealers expect growth, driven by:

• Festival and wedding season demand
• Improved rural cash flows due to healthy rabi sowing
• RBI’s repo rate at 5.25%, supporting borrowing sentiment
• Potential consumption-boosting measures in the upcoming Union Budget

However, FADA flagged finance approval delays and selective lending as key challenges that could impact conversions, especially in mass-market two-wheelers, PVs, and LCVs.

Dealer Sentiment Remains Strong

• Liquidity rated ‘Good’: 59.78%
• Positive sentiment: 64.94%
• Expectation of growth in CY’26: 77.86%

FADA concluded that India’s auto retail industry enters 2026 with strong demand visibility, healthier enquiry pipelines, and improving consumer confidence, subject to timely supply, competitive schemes, and faster financing turnaround.