By CS Vigneshwar
India’s auto-retail sector isn’t just a transactional ecosystem – it’s the backbone of our economy, driving growth, employment and innovation across urban and rural India. With a market size of Rs 9 lakh crore in FY25, our dealership network embodies resilience and opportunity at a time when every percentage point of growth can translate into millions of livelihoods.
At the heart of this success story are 9,000 dealer principals, leading 15,000 authorised dealerships and over 30,000 outlets spanning two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, construction equipment, and tractors. This expansive footprint generates 5 million direct jobs – without uprooting communities – thanks to on-the-job training and deep rural penetration. For every role at an OEM plant, the auto-retail ecosystem creates 18 downstream positions in sales, service, logistics and finance, underscoring the sector’s employment multiplier effect.
The industry’s contribution to the exchequer is equally impressive: GST collections of Rs 3.3 lakh crore in FY25, complemented by road-tax revenue of Rs 88,113 crore. In many districts, dealership density of 2.05 per 100,000 population – twice the rate of other organised-retail verticals – ensures that mobility solutions and after-sales support are a short drive away.
The revenue composition of India’s auto-retail industry reflects both product diversity and service integration. PVs account for 43% of retail revenue, CVs 27%, two-wheelers 17%, tractors 8%, and three-wheelers 5%. On the services side, new-vehicle sales drive 75-80% of turnover, while spares and accessories together with service lines contribute 15-20%. Finance and insurance bundles feature in 85% of PV transactions, adding significant value for dealers and end-customers.
This diversified model is bolstered by legacy partnerships – over 60 dealerships have served their communities for more than half a century – demonstrating the sector’s capacity for both innovation and long-term stability. On average, a PV showroom employs 100 staff, while a two-wheeler outlet sustains 50 jobs, reinforcing the industry’s role as a generator of skilled and semi-skilled employment.
From FY21 to FY25, retail volumes grew from 22 million units to 26 million units – a CAGR of over 4% – and I anticipate another 7-9% expansion in FY26. And market size is projected to reach Rs 9.7-9.9 lakh crore.
Looking ahead, India’s auto dealership network must evolve into digital-first showrooms, leveraging virtual-reality product demos, AI-driven lead scoring and predictive inventory management.
Also, the sector stands at the cusp of a green-mobility transition, ready to facilitate the rollout of electric, hybrid, CNG and hydrogen vehicles. Tier-2 and tier-3 markets represent a significant growth frontier, where improving rural infrastructure and last-mile logistics will unlock new customer segments.
To sustain this momentum, policymakers must incentivise dealer digitisation, upskill the workforce for advanced mobility services, and invest in rural road networks. The FADA stands ready to collaborate with government and industry stakeholders to create balanced regulations that foster innovation, protect consumer interests, and ensure inclusive growth. Let’s unite our efforts to drive India’s mobility revolution forward – powering prosperity, innovation and inclusive growth at every turn.
The author is president, the Federation of Automobile Dealers Associations (FADA)