Quick Takeaways
- India vehicle retail sales strengthened in the second half of 2025 as GST 2.0 materially improved affordability across key segments.
- Growth remained broad-based, with passenger vehicles leading while electrification and alternative fuels gained steady traction.
India vehicle retail sales 2025 recorded solid growth across all major segments, supported by improving affordability and policy-led momentum. Total retail volumes reached 28,161,228 units, marking a 7.71 percent increase compared with 26,145,445 units in 2024. After a muted start, demand strengthened significantly during the second half of the year as GST 2.0 revisions reshaped market sentiment.
Passenger vehicle demand showed notable resilience during the year. Retail volumes stood at 4,475,309 units, compared with 4,079,532 units in the previous year, reflecting a growth of 9.7 percent. Improved affordability, selective price corrections, and expanding fuel alternatives contributed to sustained interest across urban and semi-urban markets.
India Vehicle Retail Sales 2025 Segment Performance Overview
Two-wheeler retail sales also expanded steadily, reaching 20,295,650 units in 2025, up 7.24 percent from 18,924,815 units a year earlier. Entry-level motorcycles and scooters benefitted from easing ownership costs and improved financing confidence during the festive months.
Three-wheeler retail volumes rose by 7.21 percent to 1,309,953 units, compared with 1,221,886 units in 2024.
Commercial vehicle retail sales climbed 6.71 percent year-on-year to 1,009,654 units, up from 946,190 units in 2024. Fleet operators showed renewed confidence toward the end of the year, driven by improving freight movement, infrastructure activity, and more predictable financing conditions.
GST 2.0 Becomes the Inflection Point
Market performance in 2025 unfolded in two distinct phases. From January to August, retail demand remained uneven despite supportive macro indicators such as direct tax relief measures and cumulative interest rate easing. Buyers stayed value-focused, while finance approvals were selective in certain regions, limiting conversion momentum.
The situation changed from September onward.
Electrification and Fuel Diversification Gain Ground
India vehicle retail sales 2025 also underscored a clear transition toward diversified mobility solutions. Electric vehicle penetration increased across two-wheelers, passenger vehicles, and commercial vehicles, while remaining dominant in the three-wheeler segment. At the same time, CNG strengthened its footprint in both passenger and commercial vehicle categories, reflecting evolving buyer preferences.
Retail Outlook Remains Positive Entering 2026
Looking ahead, dealer sentiment remains strongly optimistic. A large majority of retailers expect growth over the next three months, supported by post-GST 2.0 momentum, a packed festive calendar, the ongoing marriage season, and typical financial year-end purchasing cycles.
Rural demand indicators also appear constructive, with rabi sowing progressing ahead of last year and weather forecasts supporting winter crop output. Stable borrowing costs, discussions around consumption-focused fiscal measures, and anticipated price revisions by manufacturers are expected to sustain purchase urgency, provided supply timelines and inventory discipline remain well managed.
Passenger vehicle demand showed notable resilience during the year. Retail volumes stood at 4,475,309 units, compared with 4,079,532 units in the previous year, reflecting a growth of 9.7 percent. Improved affordability, selective price corrections, and expanding fuel alternatives contributed to sustained interest across urban and semi-urban markets.
India Vehicle Retail Sales 2025 Segment Performance Overview
Two-wheeler retail sales also expanded steadily, reaching 20,295,650 units in 2025, up 7.24 percent from 18,924,815 units a year earlier. Entry-level motorcycles and scooters benefitted from easing ownership costs and improved financing confidence during the festive months.
Three-wheeler retail volumes rose by 7.21 percent to 1,309,953 units, compared with 1,221,886 units in 2024.
- The segment continued to benefit from strong last-mile connectivity demand and the rising adoption of electric variants in urban transport ecosystems.
Commercial vehicle retail sales climbed 6.71 percent year-on-year to 1,009,654 units, up from 946,190 units in 2024. Fleet operators showed renewed confidence toward the end of the year, driven by improving freight movement, infrastructure activity, and more predictable financing conditions.
GST 2.0 Becomes the Inflection Point
Market performance in 2025 unfolded in two distinct phases. From January to August, retail demand remained uneven despite supportive macro indicators such as direct tax relief measures and cumulative interest rate easing. Buyers stayed value-focused, while finance approvals were selective in certain regions, limiting conversion momentum.
The situation changed from September onward.
- GST 2.0 rate rationalisation, including reductions for mass-market categories such as small cars, two-wheelers up to 350cc, three-wheelers, and select commercial vehicle classes, significantly improved affordability.
Electrification and Fuel Diversification Gain Ground
India vehicle retail sales 2025 also underscored a clear transition toward diversified mobility solutions. Electric vehicle penetration increased across two-wheelers, passenger vehicles, and commercial vehicles, while remaining dominant in the three-wheeler segment. At the same time, CNG strengthened its footprint in both passenger and commercial vehicle categories, reflecting evolving buyer preferences.
Retail Outlook Remains Positive Entering 2026
Looking ahead, dealer sentiment remains strongly optimistic. A large majority of retailers expect growth over the next three months, supported by post-GST 2.0 momentum, a packed festive calendar, the ongoing marriage season, and typical financial year-end purchasing cycles.
Rural demand indicators also appear constructive, with rabi sowing progressing ahead of last year and weather forecasts supporting winter crop output. Stable borrowing costs, discussions around consumption-focused fiscal measures, and anticipated price revisions by manufacturers are expected to sustain purchase urgency, provided supply timelines and inventory discipline remain well managed.
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