India Auto Retail Sales Rise 7.71%

India's automobile retail industry experienced a significant turnaround in 2025, with total vehicle retail sales increasing by 7.71% to 28.16 million units, as reported by the Federation of Automobile Dealers Associations. The year was characterized by a subdued first half, followed by a strong revival from September onwards. This resurgence was primarily fueled by the implementation of Goods and Services Tax (India) 2.0 rate rationalization, which reduced tax incidence on mass-market vehicles, improving affordability and consumer sentiment. All major segments, including two-wheelers, passenger vehicles, commercial vehicles, and three-wheelers, recorded healthy growth, with rural markets outperforming urban centers in passenger vehicle sales. Electric vehicles and CNG vehicles also gained significant traction, indicating a shift towards a more diversified mobility mix. The year concluded with a strong December, and dealer sentiment remains optimistic for early 2026, supported by festival demand, rural cash flow improvement, and easier monetary conditions following the State Bank of India's repo rate cut.