Indian auto industry posts record performance in CY25 as all segments deliver strong growth

The industry expects the positive momentum to continue well into CY26, supported by multiple factors.

• India's auto sales crossed 2.68 crore units in 2025, up 5.1% y-o-y.
• Passenger vehicles hit record sales, led by utility vehicles and GST rate cuts.
• Scooters and three-wheelers grew strongly; motorcycles and e-rickshaws lagged.

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The Indian automobile industry wrapped up calendar year (CY) 2025 with total vehicle sales crossing 2.68 crore units in the domestic market as all the segments -- passenger vehicle (PV), commercial vehicle (CV), three-wheeler and two-wheeler -- delivered a strong growth.

According to data released by Society of Indian Automobile Manufacturers (SIAM), overall sales grew 5.1% year-on-year (y-o-y) during January to December 2025, supported by policy changes, easier financing and a strong festive quarter towards the end of the year, driven by the Goods and Services Tax (GST) rate rationalisation.

While PVs, CVs and three-wheelers recorded their highest-ever domestic sales in a calendar year, the two-wheeler segment posted its second-best annual performance so far.

The PV segment sold 44.90 lakh units in CY25, registering a 5% y-o-y growth compared to CY24. Growth, however, was not evenly spread across sub-segments. The utility vehicles continued to do the heavy lifting, with sales rising 7.4% y-o-y to 29.54 lakh units. The passenger car sales remained almost flat during the year at 13.80 lakh units, indicating continued pressure in the small and mid-size car spaces. Vans saw marginal growth of 1.1% y-o-y with volumes at 1.55 lakh units.

SIAM said that PV demand in CY25 was helped by improved affordability following GST rate reductions, income tax relief measures and multiple repo rate cuts by the RBI, which brought down financing costs. The industry also saw a noticeable improvement in buyer sentiment during the festive months, which helped push volumes higher in the second half of the year.

The CV segment saw a clearer and more broad-based recovery during CY25 as the domestic sales stood at 10.28 lakh units, up 7.7% y-o-y compared to the previous year. Medium and heavy CVs recorded sales of 3.98 lakh units, while light CVs sold 6.30 lakh units during the year. Growth in LCVs was stronger, especially in passenger carrier variants, which grew 15% y-o-y. SIAM linked this recovery to increased freight movement, higher economic activity and rising demand for intra-city logistics, supported by the rollout of GST 2.0 and higher consumption levels.

Three-wheelers also ended CY25 with healthy growth. The segment sold 7.88 lakh units during the year, marking an 8.2% y-o-y increase over CY24. The passenger carrier three-wheelers remained the main growth driver, helped by the rising movement of people and goods in urban and semi-urban areas. Easier financing options and replacement demand also supported sales. However, the e-rickshaw segment continued to struggle, with volumes falling sharply compared to last year.

The two-wheeler segment crossed the 2-crore mark for the second time in a calendar year, though growth remained moderate. Sales stood at 2.05 crore units in CY25, up 4.9% y-o-y. Scooters were the standout performer, growing 12.7% y-o-y to 75.24 lakh units, reflecting strong urban demand. Motorcycle sales were largely flat, rising just 1.1% y-o-y to 1.25 crore units, while mopeds continued to decline. SIAM said improved affordability due to GST reforms, income tax relief and repo rate cuts helped support two-wheeler demand, with urban markets leading the recovery.

The strong second-half momentum was clearly visible in December 2025. The PV sales for the month rose 26.8% y-o-y to 3.99 lakh units. The two-wheeler sales jumped sharply by 39.4% y-o-y to 15.41 lakh units, led by strong growth in scooters and motorcycles. The three-wheeler sales stood at 61,924 units in December, up 17.4% y-o-y compared to the same month last year.

"Looking ahead, the industry expects the positive momentum to continue well into CY26, supported by stable macro-economic conditions, improving affordability and continued policy support. The industry will also continue to monitor geopolitical developments to ensure resilience in supply chain and export volumes," said Shailesh Chandra, President, SIAM.