India's passenger vehicle (PV) sales hit a historic high of 43 lakh units in FY25, marking a significant 2% increase compared to FY24. According to the Society of Indian Automobile Manufacturers (SIAM), this growth highlights the resilience and strength of the Indian automobile market, with utility vehicles (UVs) leading the charge in the sector. UVs accounted for a dominant 65% of total PV sales, a rise from about 60% in FY24, emphasizing the growing demand for larger, versatile vehicles.

The expansion of utility vehicles was significantly aided by new model launches that showcased modern designs, advanced features, and better performance. These vehicles attracted substantial consumer interest, supported by attractive discounts and promotional schemes that sustained demand. In addition to this, the passenger vehicle exports reached 7.7 lakh units, marking a 14.6% year-on-year (YoY) increase. This surge in exports was driven by global demand for Indian-manufactured vehicles, especially in Latin America and Africa, where India has solidified its presence as a global manufacturing hub.

Key Highlights of the Indian Automobile Industry in FY25:

• Growth in Domestic Sales: The Indian automobile industry recorded an impressive 7.3% growth in domestic sales. The demand for both passenger vehicles and two-wheelers remained robust throughout the year, contributing to this overall expansion.

• Strong Performance in Exports: India's exports of vehicles surged by 19.2%, bolstered by strong demand in international markets. Notably, two-wheeler exports grew by 21.4%, reaching 4.2 million units. The demand for Indian-made two-wheelers remains particularly high in regions such as Africa and Latin America.

• Two-Wheeler Sales Growth: The two-wheeler market in India experienced a significant rebound, with 19.6 million units sold in FY25, reflecting a 9.1% YoY increase. Scooters, in particular, played a major role in this growth, supported by improved rural connectivity and increasing consumer confidence. Additionally, electric vehicles (EVs) saw a notable rise, with EVs accounting for more than 6% of total two-wheeler sales.

• Electric Vehicle Adoption: The demand for electric vehicles continues to grow, with more consumers turning towards EVs due to environmental concerns, government incentives, and advancements in battery technology. The continued rise in EV adoption across segments reflects the industry's shift towards sustainable mobility.

The performance of India’s automobile industry in FY25 demonstrates its resilience in the face of global economic uncertainties, with the market benefiting from favorable policy support, infrastructure investments, and growing consumer demand.

Outlook for FY26:

SIAM has expressed confidence that the growth momentum will continue into FY26, underpinned by stable macroeconomic conditions, anticipated favorable monsoon patterns, and strong policy support. Additionally, the industry is expected to see further gains as infrastructure investments improve mobility and connectivity, paving the way for more robust growth across all vehicle segments, including passenger vehicles and two-wheelers.

With the Indian automobile sector continuing to thrive, the combination of domestic demand and international export growth positions India as a key player in the global automotive landscape. The industry is poised for even more innovation, with advancements in electric mobility, sustainability efforts, and consumer-centric designs driving the future of automotive growth in India.

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