Indian Auto Industry Records Landmark 2025 with All-Time High Sales Across Segments
Indian automobile industry achieved record performance in 2025 with passenger vehicle dispatches reaching all-time high of 44.89 lakh units, up 5% YoY. Utility vehicles led growth at 7%, while commercial vehicles and three-wheelers both grew 8%. December witnessed exceptional surge with passenger vehicles up 27% and two-wheelers jumping 39% YoY. SIAM attributes success to GST reforms, policy support, and festive demand, expecting continued momentum into 2026.
*this image is generated using AI for illustrative purposes only.
The Indian automobile industry celebrated a landmark year in 2025, with passenger vehicle dispatches from manufacturers to dealerships reaching an all-time high. According to the Society of Indian Automobile Manufacturers (SIAM), overall passenger vehicle wholesales rose 5% year-on-year to 44.89 lakh units, compared with 42.75 lakh units in the previous calendar year. The strong performance was attributed to price cuts following GST reforms and robust festive-season demand.
Record-Breaking Performance Across Vehicle Segments
The 2025 calendar year witnessed exceptional growth across all major vehicle categories. Utility vehicles continued as the primary growth driver, with dispatches increasing 7% to 29.54 lakh units from 27.50 lakh units in 2024. The comprehensive performance across segments is detailed below:
| Vehicle Segment | 2025 Units | 2024 Units | Growth (%) |
|---|---|---|---|
| Passenger Vehicles | 44,89,717 | 42,74,793 | +5% |
| Utility Vehicles | 29,54,279 | 27,49,932 | +7% |
| Two-wheelers | 2,05,00,639 | 1,95,43,093 | +5% |
| Commercial Vehicles | 10,27,877 | 9,54,051 | +8% |
| Three-wheelers | 7,88,429 | 7,28,670 | +8% |
Passenger car wholesales edged up marginally to 13.79 lakh units, while van dispatches increased by 1% compared to the previous year. Commercial vehicles and three-wheelers both recorded 8% growth, with two-wheeler sales maintaining steady momentum at 5% year-on-year growth.
December 2025 Surge and Q3 Performance
December 2025 demonstrated particularly strong momentum across all segments. Passenger vehicle dispatches surged 27% year-on-year, driven by robust demand for utility vehicles. Two-wheeler dispatches to dealers jumped 39% year-on-year to 15.41 lakh units, up from 11.06 lakh units in December 2024.
| December Performance | 2025 | 2024 | Growth (%) |
|---|---|---|---|
| Passenger Vehicles | 3,99,216 units | 3,14,934 units | +26.8% |
| Two-wheelers | 15,41,036 units | 11,05,565 units | +39% |
| Three-wheelers | 61,924 units | - | +17% |
SIAM Director General Rajesh Menon highlighted that all vehicle segments recorded their highest-ever third-quarter sales in FY2025-26, with double-digit growth over the previous year.
Policy Reforms Drive Market Growth
SIAM President Shailesh Chandra emphasized the role of structural policy reforms in creating a positive demand environment. "2025 has been a landmark year for the Indian auto industry," Chandra stated, noting that multiple policy initiatives supported growth despite supply-side challenges in the first half.
Key policy drivers included:
- Income tax relief measures
- Successive repo rate cuts
- GST 2.0 roll-out and rate reductions
- Enhanced vehicle affordability through GST reforms
The reduction in GST rates made vehicles more affordable and provided fresh momentum to the sector. Chandra noted that growth was broad-based, with passenger vehicles, commercial vehicles, and three-wheelers recording their highest-ever calendar-year sales, while two-wheelers posted their second-highest sales on record.
Export Performance and Future Outlook
Exports registered double-digit growth across vehicle segments in 2025 compared to 2024, contributing to the industry's overall robust performance. The industry has entered the fourth quarter of FY2025-26 with strong momentum after achieving robust double-digit growth across all segments in late 2025.
SIAM expects continued positive momentum into 2026, supported by stable macroeconomic conditions, improving affordability, and continued policy support. The year-end sales push, healthy booking pipeline, and full pass-through of interest rate cuts announced in 2025 on vehicle loans are expected to sustain demand growth.
"While remaining watchful of geopolitical developments, the industry expects FY 2025-26 to close on a positive growth trajectory, with policy-led tailwinds firmly in place," the industry body stated, emphasizing the robust performance foundation established in recent years.
16
