NEW DELHI. India’s auto retail sales climbed by 7.7 per cent in 2025, reaching a total of 24.5 million units. The Federation of Automobile Dealers Associations (FADA) released these annual figures today. This growth marks a significant recovery, especially after a sluggish performance in the first quarter of the year. A robust rebound in the second half, supported by the festive season, drove the final numbers upward. Most segments within the industry witnessed positive momentum by the year’s end.
Segment Performance in India’s Auto Retail Sales
Passenger vehicle sales led the charge with a 9 per cent annual growth rate. Manufacturers launched several new sport utility vehicle (SUV) models, which captured significant consumer interest. The two-wheeler segment also saw a healthy increase of 7 per cent compared to the previous year. Rural demand played a crucial role in this recovery as harvest returns improved. FADA noted that urban markets also remained strong due to attractive financing schemes and festive offers.
Furthermore, the electric vehicle (EV) market expanded its share within the total retail figures. Better charging infrastructure and government incentives encouraged more buyers to switch to cleaner energy. Commercial vehicle sales grew at a more modest pace of 4 per cent during the same period. Increased infrastructure spending by the government helped maintain steady demand for heavy lorries and tippers.
Challenges and Future Outlook
Despite the growth, dealerships faced challenges with high inventory levels during the mid-year period. FADA worked closely with manufacturers to rationalise stock and prevent a liquidity crunch for dealers. Rising insurance costs and slight fluctuations in fuel prices also influenced buyer sentiment periodically. However, the overall consumer confidence remained high throughout the final quarter of 2025.
Additionally, the industry expects the momentum to continue into the first half of 2026. Many organisations are preparing for new model unveils at the upcoming motor shows. FADA suggests that interest rate stability will be a key factor for sustained growth. The focus now shifts toward digital sales platforms and improving the after-sales experience for customers.
India’s auto retail sales figures for 2025 highlight the resilience of the domestic market. With steady economic growth and a youthful population, the demand for personal mobility continues to rise. The industry remains optimistic about hitting new records in the coming financial year.
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