Quick Takeaways
- Domestic passenger vehicle demand accelerated sharply as tax relief and SUV popularity lifted year-end dispatches.
- Compact cars and SUVs emerged as the dominant growth engines despite export headwinds.
On December 2025, India car sales December 2025 recorded a sharp year-end rise as the country’s two largest automakers reported strong dealer dispatches, driven by earlier tax reductions and sustained consumer demand. The momentum reflected how fiscal policy support continued to influence buying decisions into the final month of the year.
Small cars and SUVs drive India car sales December 2025
These tax measures significantly supported the small car segment, the largest volume category in the Indian passenger vehicle market. Market leader Maruti Suzuki benefited the most, with its compact car sales rising 50 percent to 92,929 units, marking the highest level since January 2025.
Utility vehicles also contributed meaningfully to the performance. Sales in this category increased 33 percent, helping domestic dealer dispatches climb 37 percent to a record 178,646 units during the month.
Exports dip while domestic demand remains strong
While domestic volumes surged, overall monthly sales growth was partially moderated by exports. Including overseas shipments, total volumes rose 22 percent, even as exports declined by roughly one-third, reflecting softer demand in select international markets.
Mahindra & Mahindra also reported a robust December performance, posting a 23 percent increase in monthly sales. With a product lineup focused entirely on SUVs, the company continued to benefit from rising consumer preference for feature-rich and technology-enabled utility vehicles.
SUV-focused strategy reshapes market rankings
Strong SUV demand and recent model launches helped Mahindra achieve an 18 percent sales growth rate in fiscal 2026, placing it among the fastest-growing automakers in India. This performance enabled the company to move ahead of Hyundai India and Tata Motors, securing the second position in the passenger vehicle market during the current financial year.
The December results underscore how targeted tax relief, product strategy, and shifting customer preferences combined to shape India car sales December 2025, reinforcing SUVs and compact cars as the key growth drivers heading into the new year.
- India had reduced the goods and services tax in September to stimulate vehicle purchases, lowering the levy on small cars to 18 percent from 28 percent and cutting taxes on larger sports utility vehicles with engine capacities above 1,500 cc to 40 percent from nearly 50 percent.
Small cars and SUVs drive India car sales December 2025
These tax measures significantly supported the small car segment, the largest volume category in the Indian passenger vehicle market. Market leader Maruti Suzuki benefited the most, with its compact car sales rising 50 percent to 92,929 units, marking the highest level since January 2025.
Utility vehicles also contributed meaningfully to the performance. Sales in this category increased 33 percent, helping domestic dealer dispatches climb 37 percent to a record 178,646 units during the month.
Exports dip while domestic demand remains strong
While domestic volumes surged, overall monthly sales growth was partially moderated by exports. Including overseas shipments, total volumes rose 22 percent, even as exports declined by roughly one-third, reflecting softer demand in select international markets.
Mahindra & Mahindra also reported a robust December performance, posting a 23 percent increase in monthly sales. With a product lineup focused entirely on SUVs, the company continued to benefit from rising consumer preference for feature-rich and technology-enabled utility vehicles.
SUV-focused strategy reshapes market rankings
Strong SUV demand and recent model launches helped Mahindra achieve an 18 percent sales growth rate in fiscal 2026, placing it among the fastest-growing automakers in India. This performance enabled the company to move ahead of Hyundai India and Tata Motors, securing the second position in the passenger vehicle market during the current financial year.
The December results underscore how targeted tax relief, product strategy, and shifting customer preferences combined to shape India car sales December 2025, reinforcing SUVs and compact cars as the key growth drivers heading into the new year.
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