India's automobile retail sales achieved robust growth of 7.71% to 2.82 crore units (2,81,61,228 units) in 2025 compared to 2.61 crore units (2,61,45,445 units) in 2024, according to the Federation of Automobile Dealers Associations (FADA). Passenger vehicle retail sales stood at 44.75 lakh units (44,75,309 units), representing a strong 9.70% growth from 40.79 lakh units (40,79,532 units) in 2024. The performance was driven by broad-based participation with rural PV sales leading the charge at 12.31% compared to urban markets at 8.08%, demonstrating the strengthening spread of personal mobility beyond metros.
Electric vehicle sales witnessed explosive growth of 77% YoY to 1.77 lakh units in 2025, aided by a slew of electric vehicle launches by carmakers. EV penetration jumped to 3.95% in 2025 from 2.45% in 2024, demonstrating accelerating adoption across the country. According to FADA President C S Vigneshwar, the share of electric vehicles moved up across two-wheelers, passenger vehicles, and commercial vehicles while remaining dominant in three-wheelers. Two-wheeler EV share improved to 7.40% in December versus 6.13% last year, reflecting rising acceptance especially in urban markets.
The automotive sector witnessed a significant shift in fuel preferences during 2025. While diesel-powered cars maintained their 18% share, petrol car share declined from 52.32% in 2024 to 48.52% in 2025. CNG cars gained substantial ground, accounting for 21% of total sales compared to 18% a year ago, with CNG strengthening its presence in both passenger and commercial vehicles. This diversified mobility mix signals changing consumer preferences towards alternative fuel technologies and improved environmental consciousness.
Two-wheeler sales crossed the 2.03 crore mark, growing 7.24% YoY to 2.03 crore units (2,02,95,650 units) compared to 1.89 crore units (1,89,24,815 units) in 2024, marking the first time the segment crossed 2 crore units since the COVID-19 pandemic. Commercial vehicles also witnessed robust growth of 6.71% to 10.10 lakh units (10,09,654 units) in 2025 as against 9.46 lakh units (9,46,190 units) in 2024, led by underlying economic activity and improved goods movement. Three-wheeler retail sales grew 7.21% to 13.10 lakh units (13,09,953 units) compared to 12.22 lakh units (12,21,886 units) in 2024, according to FADA data.
The year proved to be a tale of two halves, with January to August remaining subdued despite supportive macro cues including direct tax relief in the Union Budget and RBI's cumulative rate easing through 2025. As FADA President C S Vigneshwar explained, customers stayed value-conscious and financier approvals remained selective in pockets, resulting in uneven conversions across markets. The turning point came from September with GST 2.0 rate rationalization, including meaningful reductions for mass segments like small cars, two-wheelers up to 350cc, three-wheelers and commercial categories, which improved affordability and lifted sentiment through the September-December period.
Looking ahead, FADA maintains a decisively upbeat retail outlook with 74.91% of dealers expecting growth over the next three months. According to FADA President C S Vigneshwar, "Overall, CY25 closes on a celebratory note, stronger demand visibility, healthier enquiry pipelines and a more confident consumer, as we step into 2026." Demand is expected to stay supported by 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.
