Summary
Despite a noticeable slowdown in sales growth, India’s auto industry has once again reached record-breaking heights. According to the Society of Indian Automobile Manufacturers (SIAM), the financial year ending March 31, 2025, saw the highest-ever sales volumes in multiple segments, led by a surge in utility vehicle and two-wheeler demand.
Table of Contents
🛻 Passenger Vehicles: Driven by SUVs and Deals
India’s car market crossed a new milestone with 4.3 million passenger vehicles — including cars, sedans, and SUVs — sold in FY 2024-25. That’s a 2% increase from 4.21 million units sold in the previous fiscal year. While the percentage growth slowed significantly from the 8.4% seen last year, the numbers themselves paint a story of resilience.
What’s driving demand?
Promotional offers and deep discounts played a key role in keeping the momentum alive. The real star, however, was the SUV segment. Utility vehicles made up 65% of all car sales — a notable rise from 60% the previous year. Indian buyers continued to prefer rugged, spacious, feature-loaded SUVs, and carmakers responded with multiple launches across price points.
🛵 Two-Wheelers: Rural Rebound Sparks Sales Surge
The rural economy showed promising signs of recovery, and this was most evident in the two-wheeler segment.
Sales of scooters, motorcycles, and mopeds rose by 9.1% to touch nearly 19.6 million units. Scooters led the charge with a 17.4% growth, while motorcycles followed with a solid performance as well. Improved rural connectivity and rising consumer confidence in tier-2 and tier-3 towns contributed significantly to the bounce-back.
🛺 Three-Wheelers Ride on Last-Mile Mobility
Three-wheeler sales climbed by 6.7% to reach over 741,000 units — thanks to their growing importance in last-mile delivery and passenger transport. Increased focus on electric rickshaws, government-backed urban mobility initiatives, and better financing access all played a part.
🚚 Commercial Vehicles: A Mixed Bag
On the commercial side, sales dipped slightly by 1.2% to about 956,000 units. While this might seem discouraging at first glance, industry watchers note that fleet operators are migrating to higher Gross Vehicle Weight (GVW) trucks. This shift reflects a push for more efficient freight movement, especially with India’s expanding highway and expressway network.
The segment did find support in inter-city bus sales, which saw improvement thanks to infrastructure upgrades and increasing demand for mass mobility solutions.
⚡ Electric Vehicles: Gaining Ground with Government Push
India’s electric vehicle (EV) story is gaining traction with strong government support. The launch of schemes like EMPS, PM E-Drive, and PM e-Sewa have boosted adoption rates across the board.
- EV registrations hit 1.97 million units, up 16.9% from FY24.
- Electric cars saw an 18.2% growth, crossing 100,000 units.
- Electric two-wheelers grew by 21.2%, reaching 1.15 million units.
SIAM attributes this rise to supportive policies, improved financing access, and wider availability of EVs from manufacturers.
🌍 Exports Rebound: ‘Made in India’ Vehicles Win Global Fans
Another bright spot for the industry came from exports. Passenger vehicles and two-wheelers witnessed a strong comeback in overseas markets, with Indian automakers finding takers in Africa and neighbouring countries.
Improved global demand and India’s rising competitiveness in manufacturing — backed by better quality and pricing — have made ‘Made in India’ cars and bikes more appealing abroad.
📈 A Look Ahead: Optimism Fueled by Policy, Monsoon & Tax Reforms
Looking forward, SIAM is optimistic. President Shailesh Chandra pointed out that stable macroeconomic conditions, continued infrastructure investments, and government policy support will likely keep the industry on a growth trajectory in FY 2025-26.
Key tailwinds expected to boost demand:
- A normal monsoon forecast, aiding rural economic activity.
- Recent income tax reforms and RBI rate cuts, improving consumer purchasing power.
- Better access to financing, especially in rural and semi-urban markets.
📊 March Snapshot: Signs of Ongoing Momentum
To round out the fiscal year:
- Passenger vehicle sales rose 3.6% to 381,358 units.
- Two-wheeler sales jumped 11.4% to 1.65 million units.
- Three-wheeler sales increased 10.5% to 62,813 units.
🚀 Final Word: Strong Foundation, Brighter Future
While some segments showed moderate growth due to the high base effect, India’s auto industry has clearly found its rhythm again. The third consecutive year of record-breaking sales across categories indicates strong underlying demand, especially with improving rural sentiment and a policy landscape geared towards long-term growth.
The industry now eyes FY 2025–26 with renewed hope, determined to keep the wheels of India’s mobility revolution spinning forward.