India's Auto Sector Hits New Highs: Report The uptick in sales project a burgeoning middle class with higher disposable income. But as always, global geopolitical conditions and supply chain dynamics will remain crucial watchpoints going forward.
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The Indian automobile industry closed FY 2024-25 on a high note, registering strong domestic and export numbers across most vehicle categories. According to the latest report by the society of Indian automobile manufacturers (SIAM), the sector maintained its upward trajectory.
Domestic sales across the industry grew by 7.3 per cent, while exports surged by 19.2 per cent. SIAM credits this growth to healthy consumer sentiment, infrastructure spending, and a policy push towards sustainable transportation.
Passenger vehicles (PVs) led the charge with record-breaking sales of 4.3 million units, a 2 per cent increase over the previous year, despite a high base effect from FY 2023-24. Utility vehicles (UVs), now contributing 65 per cent of total PV sales (up from 60 per cent), continued to be the key driver, thanks to modern designs, advanced features, and strategic model launches that aligned well with consumer expectations. Competitive pricing and promotional offers also played a crucial role in sustaining volumes.
On the export front, PVs saw their best performance yet, with 0.77 million units shipped overseas, a 14.6 per cent rise over the previous year. "Exports have been driven by demand for global models being manufactured in India, especially in Latin America and Africa," said Rajesh Menon, SIAM director general, noting that some manufacturers have begun shipping to developed markets as well.
Two-wheelers made a significant comeback, with 19.6 million units sold, up 9.1 per cent year-on-year (YoY). A revival in rural demand, bolstered by better connectivity and rising consumer confidence, pushed the segment forward. Scooters led the growth, particularly in semi-urban and rural regions, aided by new feature-rich models. Electric vehicles are also making their mark, crossing 6 per cent share of total Two-Wheeler sales for the first time.
Two-wheeler exports soared by 21.4 per cent to 4.2 million units. New market exploration, product innovation, and economic stability in African nations, combined with growing demand in Latin America, helped boost outbound shipments.
Three-wheelers also had a standout year. With 7.4 lakh units sold, a 6.7 per cent increase. The segment not only surpassed pre-pandemic levels but also reached its highest ever sales. Passenger sub-segments were the primary growth drivers, fueled by demand for last-mile mobility solutions and improved financing options. Electrification efforts and replacement demand further supported this surge. Exports in this category edged up by 2.3 per cent, reaching 3.1 lakh units.
In contrast, commercial vehicles (CVs) saw a minor dip of 1.2 per cent in overall sales, settling at 9.6 lakh units. However, the final quarter of the fiscal showed signs of recovery with a 1.5 per cent uptick. While the trucks segment remained subdued, fleet upgrades to higher gross vehicle weight (GVW) trucks helped maintain freight efficiency. On the passenger side, expanding highways and improved connectivity boosted inter-city bus sales.
CV exports bucked the trend, rising by 23 per cent to 0.81 lakh units. "The expanding expressway network is reducing logistics costs and enhancing regional connectivity, which augurs well for the long-term health of the commercial vehicle space," the report noted.
Looking ahead, the industry is optimistic. A normal monsoon forecast, reforms in personal income tax, and two consecutive rate cuts by the Reserve Bank of India are expected to stimulate consumption. Shailesh Chandra, President of SIAM, emphasized the impact of policy continuity and recent government schemes like PM E-Drive and PM e-Sewa in fostering sustainable mobility.
"The Indian Automobile Industry continued its steady performance in FY2024–25, driven by healthy demand, infrastructure investments, and supportive Government policies," Chandra said. "Exports, particularly of passenger vehicles and two-wheelers, reflect India's growing competitiveness in the global auto market."
