EVs, CNG Gain Ground As India’s Auto Retail Market Expands In 2025

Retail sales of vehicles across categories in India in 2025 grew by 7.71 per cent at 2,81,61,228 units as compared to 2,61,45,445 in 2024, with GST 2.0 helping overcome a subdued start to the year, Federation of Automobile Dealers Associations said on Tuesday.

Passenger vehicle (PV) retail sales stood at 44,75,309 units in 2025 as against 40,79,532 units in 2024, a growth of 9.7 per cent, Federation of Automobile Dealers Associations (FADA) said in a statement.

Similarly, two-wheeler (2W) sales also grew by 7.24 per cent at 2,02,95,650 units last year as compared to 1,89,24,815 units in 2024.

In 2025, three-wheeler retail sales were at 13,09,953 units as compared to 12,21,886 units in 2024, up 7.21 per cent.

Commercial vehicles (CV) retail also witnessed a growth of 6.71 per cent at 10,09,654 units in 2025 as against 9,46,190 units in 2024.

Commenting on the performance, FADA President CS Vigneshwar said 2025 was a tale of two halves -- January to August remained subdued despite supportive macro cues such as direct-tax relief in the Union Budget and RBI's cumulative rate easing through 2025.

During this phase, customers stayed value-conscious and financier approvals remained selective in pockets, resulting in uneven conversions across markets.

"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 September-December," Vigneshwar said.

He further said 2025 also reinforced the transition that is underway in terms of electrification with EV share moving up in 2W, PV, CV and remained dominant in 3W, while CNG strengthened its presence in PV and CV, signalling a more diversified mobility mix.

"Overall, CY25 closes on a celebratory note, stronger demand visibility, healthier enquiry pipelines and a more confident consumer, as we step into 2026," Vigneshwar noted.

On the outlook, FADA said over the next three months, the retail outlook remains decisively upbeat as its survey showed 74.91 per cent of dealers expecting growth.

"Demand should stay supported by the post-GST 2.0 sentiment, a packed calendar of festivals and the marriage season, and typical financial-year-end buying," it added.

The dealers' body further said 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.

On the macro side, the RBI's repo rate at 5.25 per cent 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.

"Price revisions announcement by OEMs are likely to keep purchase urgency intact, even as discounts may normalise on select 'model year 2025' inventory," it said, adding overall sentiment is positive and improving, subject to timely supply, sharper finance turnaround time and disciplined channel inventory. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)