Passenger vehicle (PV) retail sales jumped 26.64% year-on-year (YoY) to 3,79,671 units in December 2025, up from 2,99,799 units in December 2024. The surge was driven by strong rural demand, which grew 32.40% YoY, significantly outpacing the 22.93% growth recorded in urban markets, according to data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday.
For the calendar year January–December 2025, PV retail sales rose 9.70% to 4.48 million units from 4.08 million units a year earlier. Rural markets once again outperformed urban centres, with full-year rural PV sales growing 12.31%, compared with 8.08% growth in urban areas, highlighting the sector’s increasing reliance on non-metro demand.
Strong retail momentum
The strong retail momentum was mirrored in wholesale trends. Vehicle dispatches from manufacturers to dealers surged 26.2% YoY to 4,07,497 units in December 2025, compared with 3,22,965 units in December 2024. For the full CY25, wholesale volumes rose 5.7% to around 4.55 million units, up from 4.31 million units in CY24.
According to FADA data, the overall automobile industry grew 14.63% in December to 2.03 million units up from 1.77 million units in December 2024. The growth was 7.71% in CY25, with total retail volumes reaching 28.16 million units, compared with 26.15 million units in CY24. The growth was largely driven by a strong rebound in the second half of the year following GST reductions, after a relatively muted January–August period.
FADA President said
Explaining the trend, FADA President C.S. Vigneshwar said the year was marked by contrasting phases. “Auto retail delivered a confident close, with total retails at 28.16 million, registering a 7.71% YoY growth,” he said, adding that “the year, however, was a tale of two halves.
He noted that between January and August, demand remained subdued despite supportive macro factors such as direct tax relief in the Union Budget and cumulative rate easing by the RBI. “During this phase, customers stayed value-conscious and financier approvals remained selective in pockets, resulting in uneven conversions across markets,” Vigneshwar said.
“The turning point came from September onwards,” he explained, as the GST 2.0 rate rationalisation—including meaningful reductions for mass segments such as small cars, two-wheelers (up to 350cc), three-wheelers and key commercial categories—improved affordability and lifted sentiment, leading to a clear upshift in demand through September to December.
Two-wheeler retail sales rose 9.50% YoY to 1.32 million units in December 2025, up from 1.20 million units in the same month last year. For calendar year 2025, two-wheeler sales increased 7.24% to 20.3 million units, compared with 18.92 million units in CY24.
Three-wheeler retail sales posted sharper growth, rising 36.10% YoY to 1,27,772 units in December 2025, up from 93,879 units in December 2024. For the full year, however, growth was more moderate, with sales increasing 7.21% to 1.31 million units in CY25, compared with 1.22 million units in CY24.
Looking ahead, dealer sentiment remains constructive, FADA said. For January 2026, 70.48% of dealers expect growth, with momentum likely to pick up after Sankranti and Pongal and continue into the marriage season.
For the January–March quarter, 74.91% of dealers anticipate growth, supported by festive demand, year-end buying and sustained rural traction. However, FADA flagged financing turnaround times and the availability of in-demand models as key factors to watch.