Indian Auto Sales Surge: Growth Momentum Eyes Strong 2026 Finish
Overview
India's automotive sector predicts sustained growth through 2026, fueled by stable economics, policy support, and improving affordability. The Society of Indian Automobile Manufacturers (SIAM) reported landmark sales in 2025 across all segments, including passenger vehicles, commercial vehicles, and two-wheelers, alongside robust export figures. This positive trend is expected to continue.
Indian Auto Sector Eyes Sustained Growth Through 2026
The Indian automotive industry is poised for continued expansion into 2026, bolstered by favorable macroeconomic conditions, enhanced vehicle affordability, and ongoing government policy support. The Society of Indian Automobile Manufacturers (SIAM) announced on Tuesday that 2025 marked a landmark year for the sector, with broad-based growth across all vehicle categories.
Record Sales in 2025
SIAM President Shailesh Chandra highlighted that structural reforms, including income tax reliefs and Goods and Services Tax (GST) adjustments, alongside successive repo rate cuts, laid the groundwork for robust demand. Passenger vehicles (PVs) saw a 5% year-on-year (YoY) increase, reaching approximately 4.5 million units in calendar year 2025. Total two-wheeler dispatches also climbed 5% YoY to over 20.5 million units. Three-wheelers (3Ws) and commercial vehicles (CVs) demonstrated even stronger performance, with 8.2% and 7.7% YoY growth respectively.
The grand total for domestic dispatches across all vehicle categories in 2025 reached over 26.8 million units, a 5.1% increase from the previous year. This marks the highest-ever sales volume for PVs, CVs, and 3Ws in a calendar year, with 2-wheelers achieving their second-highest sales.
Export Surge Continues
Exports also played a significant role in the industry's success, recording double-digit growth in 2025 compared to 2024. In December 2025 alone, exports surged by 21% YoY to 578,887 units. Monthly dispatches for December 2025 showed substantial gains, with PV sales up 27% YoY and two-wheeler sales soaring 39.4% YoY. Three-wheeler sales saw a 17.4% increase during the same month.
Factors Driving Momentum
Industry leaders are closely monitoring geopolitical developments to ensure supply chain resilience and maintain export volumes. However, the underlying demand drivers, including improved vehicle affordability due to GST rate reductions and a stable economic outlook, suggest a positive trajectory for the Indian auto market for the foreseeable future. The industry's ability to navigate supply-side challenges in 2025 further solidified its strong foundation for continued growth.
