Auto sales hit top gear in December: SIAM flags strong Q4 momentum, FY26 outlook upbeat

India’s automobile industry reported strong growth across segments in December 2025, supported by robust demand, policy measures and easing financing conditions, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

Passenger vehicle dispatches from manufacturers to dealers rose 27 per cent year-on-year in December, led by strong demand for utility vehicles. Total passenger vehicle sales stood at 3,99,216 units during the month, compared with 3,14,934 units in December 2024, registering a growth of 26.8 per cent.

Two-wheeler sales surge

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Two-wheeler dispatches also recorded sharp growth. Sales rose 39 per cent year-on-year to 15,41,036 units in December, up from 11,05,565 units in the same month last year. SIAM said demand remained strong across scooters and motorcycles, helping the segment maintain its upward trend.

The three-wheeler segment reported steady growth. Total three-wheeler sales stood at 61,924 units in December, up 17 per cent from 52,733 units in December 2024, supported by higher demand for both passenger and goods carriers.

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SIAM outlook for Q4 and FY26

SIAM said the automobile industry entered the fourth quarter of FY26 with firm momentum after strong double-digit growth across all vehicle segments in the latter part of 2025. The industry body expects steady traction in both wholesale and retail volumes through the quarter.

It said the year-end sales push, a healthy pipeline of bookings and the full transmission of interest rate cuts implemented during 2025 are likely to support demand. Stable macroeconomic conditions and supportive government policies are expected to underpin growth into FY26.

“While remaining watchful of geopolitical developments, the industry expects FY2025-26 to close on a positive growth trajectory, with policy-led tailwinds firmly in place,” SIAM said.

GST impact and industry commentary

SIAM President Shailesh Chandra said the reduction in GST rates made vehicles more affordable and added momentum to the sector. “The reduction of GST rates made vehicles more affordable and injected fresh momentum into the sector,” Chandra said.

“Growth during the year has been broad-based across segments, with Passenger Vehicles, Commercial Vehicles and Three-Wheelers recording their highest ever sales and Two-wheelers posting the second highest sales ever, in a calendar year,” he added.

Chandra said the industry expects the positive momentum to continue into 2026, supported by stable macroeconomic conditions, improving affordability and continued policy support. He said the industry will continue to monitor geopolitical developments to ensure resilience in supply chains and export volumes.

Strong quarterly performance and recent trends

The strong December performance followed an exceptional October–December 2025 quarter for the auto sector. Passenger vehicle sales touched a record 12.76 lakh units in Q3, marking growth of over 20 per cent, while annual car sales in 2025 reached their highest-ever level.

Two-wheeler sales in Q3 stood at 5.7 million units, with total sales of 20.5 million units for the full year, supported by higher scooter demand in urban markets. Three-wheeler sales also reached record levels, driven by rising demand for auto and passenger three-wheelers.

Commercial vehicle and truck sales during Q3 were the highest on record, benefiting from GST 2.0 implementation and increased freight movement. Tax relief measures, affordable EMIs, rising exports and strong overseas demand further supported the sector’s growth.

Earlier, SIAM data for November 2025 had also indicated strong momentum. Passenger vehicle sales stood at 4,12,405 units, up 18.7 per cent year-on-year, while two-wheeler sales rose 21.2 per cent to 19,44,475 units. Three-wheeler sales increased 21.3 per cent to 71,999 units during the month.