NEW DELHI: The auto industry closed the calendar year 2025 on a strong note, with December retail sales growing nearly 15% year on year to 20,28,821 units, according to data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday. Passenger vehicles (PVs) led the retail growth in December 2025 with sales surging nearly 27% to 379,671 units.
Data showed that India’s total retail sales in calendar year 2025 stood at 28,161,228 units, up 7.71% year-on-year growth. Category-wise, two-wheeler sales grew by 7.24% (2.02 crore), PV rose 9.70% (33.21 lakh), commercial vehicle (CV) expanded 6.71% (7.49 lakh), and Tractors posted 11.52% (7.63 lakh) surge in CY25. FADA stated that 2025 saw broad-based participation as urban retail grew 8.20% and rural 7.31%, and within PVs, rural demand was a standout, growing 12.31% versus 8.08% in urban markets, underlining the strengthening spread of personal mobility beyond metros.
FADA President C S Vigneshwar said that CY2025 was a tale of two halves as sales between January and August remained subdued despite supportive macro cues such as direct tax relief in the Union Budget and RBI’s cumulative rate easing through 2025.
“The turning point came from September onwards, when the landmark GST 2.0 rate rationalisation—including meaningful reductions for mass segments like small cars, two-wheelers (up to 350cc), three-wheelers and key commercial categories—improved affordability and lifted sentiment, leading to a clear upshift through Sept–Dec,” added Vigneshwar.
Commenting on December sales, he stated that December benefited from the continued positive sentiment post GST 2.0, year-end offers, and a fair amount of pre-buying ahead of expected price revisions in January, helping dealers convert enquiries and spillover bookings in a time-bound manner.
Two-wheeler retail was up 9.50% to 13.16 lakh units YoY in December. CV retail witnessed a robust month, registering 24.60% YoY growth to 83,666 units.
Going forward, the auto retail body expects demand to remain positive, supported by the post-GST 2.0 sentiment, a packed calendar of festivals and the marriage season, and typical financial-year-end buying. “Rural tailwinds look constructive as official updates show rabi sowing is tracking ahead of last year, and IMD’s forecast of a colder January is expected to be favourable for key winter crops—both of which can improve cash flows and confidence,” FADA said in its near term outlook.
It added, “On the macro side, the RBI’s repo rate at 5.25% provides incremental comfort on borrowing costs, while the market is also discussing a consumption-supportive, tax-relief oriented Union Budget—which, if delivered, can further lift discretionary demand.”