Indian auto industry closes 2025 on a firm footing, broad-based sales growth reported in December
- IBEF
- January 2, 2026
India’s automobile industry closed 2025 on an impressive high, with leading manufacturers reporting strong year-on-year growth in December. Healthy consumer demand, improved rural sentiment, and continued government infrastructure spending helped sustain the industry’s positive momentum through the final quarter of the year. Major automakers such as Maruti Suzuki, Mahindra & Mahindra, and Toyota Kirloskar Motor recorded robust domestic sales, supported by favourable macroeconomic conditions and rising disposable incomes. The two-wheeler segment also saw encouraging growth, reflecting revived urban mobility demand and sustained traction in semi-urban and rural markets. Strong festival-season momentum, stable financing conditions, and consumer preference for feature-rich models further underpinned performance across categories.
The growth of rural markets significantly increased demand for the entire year. The domestic tractor market grew again in December, driven by several factors. Recent government policies that encourage tractor buying, reduction in the GST charged on tractors, ongoing state subsidies, a strong Kharif harvest, and an increase in Rabi planting all supported the tractor industry's continued record growth into December. In addition, an increase in available irrigation water and improved farmer confidence (especially after a good Rabi season) created increased retail demand and further demonstrated agricultural resilience. This combination of positive trends suggests that the tractor industry is well-positioned for further growth. As we enter 2026, the Indian auto industry is strong. It has solid fundamentals, with more stable demand sources, and a positive growth outlook among manufacturers and dealers.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
