Strong performance for cars: Strong increase in December pushes passenger car sales to record highs in 2025

India’s automotive sector ended 2025 on a strong note, with passenger car sales rising sharply in December and total annual volumes hitting a new record.Data from the Society of Indian Automobile Manufacturers (SIAM) shows that passenger car sales have increased by 27% in December 2025 compared to the same month last year. This late surge saw total car sales for the year rise 5% to a record 26.8 million units.

The strong performance highlights a steady recovery in demand despite earlier challenges this year.

Passenger vehicles, two-wheelers and three-wheelers are the leaders in December

In December alone, passenger car sales rose from 3.14 lakh units in 2024 to 3.99 lakh units in 2025, registering a growth of almost 27%.The two-wheeler segment recorded the biggest jump, with sales up 39% year-on-year to 15.41 lakh units, compared to 11.05 lakh units last December.

Three-wheelers also saw a healthy growth of 17%, reaching 61,924 units by December 2025.

Strong holiday and year-end demand helped all major segments achieve higher figures.

Category-wise sales (December 2025 vs. December 2024)

The automotive industry will record record annual turnover in 2025

For the full calendar year 2025, the Indian auto industry sold 26.8 million vehicles, up from 25.5 million units in 2024, a growth of 5.1%.

Passenger vehicles rose 5% to 44.9 lakh units, while commercial vehicle sales grew nearly 8% to over 10.27 lakh units. Three-wheelers also experienced steady growth: sales increased by 8.2%, while sales of two-wheelers rose by 4.9% to more than 20.5 million units.

Passenger cars, commercial vehicles and three-wheelers all recorded their highest ever annual sales, while two-wheelers recorded their second-best year ever.

Category wise revenue (FY25 vs FY24)

Exports are rising sharply in all segments

Exports were another bright spot for the auto sector in 2025. According to SIAM data, auto exports rose by double digits in all major categories.

Exports of passenger cars grew by 16% during the year, commercial vehicles by 27%, three-wheelers by a whopping 43% and two-wheelers by 24%. This reflects growing foreign demand for Indian-made vehicles, especially in emerging markets.

The industry credits tax cuts, tariff reductions and VAT reforms

SIAM chairman Shailesh Chandra said the sector faced challenges in the first half of 2025 due to supply issues, but conditions improved later in the year.

He said measures such as income tax relief, multiple reductions in repo rate and the rollout of GST 2.0 have helped make vehicles more affordable and created a better demand environment. These changes, he added, played a key role in supporting the sector’s recovery.

Positive outlook for 2026

Looking ahead, the auto industry expects momentum to continue into 2026, supported by stable economic conditions, improving affordability and policy support.

However, SIAM also said it will closely monitor global geopolitical developments, which could impact supply chains and export markets.

For now, the strong finish to 2025 has given the Indian auto sector a confident start into the new year.