Indian automobile industry reported a growth of 7.3% in domestic sales for the financial year (FY) 2024-25, reflecting a continuation of its upward trajectory. Society of Indian Automobile Manufacturers (SIAM) reports exports also surged by 19.2%, signifying global demand. This growth is attributed to supportive government policies, infrastructure investments, and an increasing focus on sustainable mobility solutions.
Passenger Vehicles
Passenger Vehicles (PV) marked their highest ever sales, reaching 4.3 million units, albeit with a modest growth rate of 2% due to the high base effect from FY 2023-24. A noteworthy trend is the increasing consumer preference for Utility Vehicles (UVs), now accounting for 65% of total PV sales, a jump from 60% in the previous fiscal year.
Exports for Passenger Vehicles also achieved record numbers at 0.77 million units, growing by 14.6%. This growth is primarily driven by the strong demand from Latin American and African markets, coupled with new export opportunities in developed regions.
However, it is important to note a discrepancy in the SIAM reports for March 2025. While the release reflects total PV sales of 381,358 units for March 2025, including Tata Motors' data, the detailed SIAM report lists 329,742 units without Tata Motors' figures.
Two-Wheelers
Two-Wheeler sales displayed a promising recovery, recording 19.6 million units, an impressive increase of 9.1% compared to FY 2023-24. This segment’s resurgence is led by the scooter sub-segment, benefiting from improved rural and semi-urban connectivity and the introduction of new models equipped with advanced features.
Significantly, Electric Vehicles (EVs) within the two-wheeler segment crossed a critical threshold, accounting for over 6% of total sales in FY 2024-25. Furthermore, exports saw remarkable growth of 21.4%, reaching 4.2 million units, underpinned by economic stability in African markets and increased demand from Latin America.
Three-Wheelers
The three-wheeler segment achieved its highest ever sales volume, selling 740,000 units in FY 2024-25, surpassing pre-pandemic peaks with a growth of 6.7%. The surge was predominantly driven by increased demand for last-mile mobility solutions, especially in urban and semi-urban areas, combined with the easier availability of financing.
Exports in this segment grew modestly by 2.3%, exporting 310,000 units, further solidifying India's role in global three-wheeler markets.
Commercial Vehicles
Commercial Vehicles (CVs) encountered a slight downturn, declining by 1.2% year-on-year. Nonetheless, a positive growth of 1.5% was recorded in Q4 (January-March 2025), indicating a recovery trajectory. This segment's performance benefited from the expansion of highway infrastructure, reducing logistics costs and supporting the move towards higher Gross Vehicle Weight (GVW) vehicles.
Bus sales, bolstered by infrastructure developments for inter-city and mass mobility in intra-city transportation, showed resilience despite overall segment de-growth. Additionally, CV exports recorded significant growth of 23%, highlighting India's increasing role as a global commercial vehicle exporter.
Electric Vehicle Adoption Gains Momentum
Electric Vehicle (EV) registrations reached 1.97 million units in FY 2024-25, marking a growth of 16.9%. The adoption of electric Passenger Vehicles crossed 100,000 units, growing by 18.2%, whereas electric Two-Wheelers grew by 21.2%, registering 1.15 million units. Electric Three-Wheelers also recorded healthy growth of 10.5%, with nearly 700,000 units registered.
These figures underscore the significant role played by recent government interventions, including the Electric Mobility Promotion Scheme (EMPS) and PM e-DRIVE, alongside a series of new EV launches by manufacturers.
Growth Outlook
Looking forward to FY 2025-26, the automotive sector is expected to maintain its growth momentum. Stable macroeconomic conditions, proactive government policies, infrastructure expenditure, and anticipated normal monsoon conditions forecasted for 2025 are likely to be beneficial. Recent personal income tax reforms and consecutive rate cuts by the RBI are expected to boost vehicle financing, further stimulating market demand.
Export markets, especially in Africa and neighbouring regions, will continue to present opportunities for growth, with 'Made in India' vehicles increasingly gaining traction internationally.
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