CHENNAI: The automobile industry started the New Year on a positive note with passenger vehicle sales showing a record 45.5 lakh units in 2025, a growth of nearly 6 per cent.
Steered by GST 2.0, rising disposable income, need for second vehicle, personalised vehicle have upped sales in December, with market leader Maruti Suzuki India reporting 22 per cent growth.
Notable brands to have recorded a surge in sales include Mahindra & Mahindra, Tata Motors Passenger Vehicles, Hyundai Motor, Toyota Kirloskar Motor, Kia, Audi and Skoda Auto India, helping the industry beat the previous highest of 43.05 lakh units clocked in 2024.
Home-grown automakers Mahindra & Mahindra and Tata Motors Passenger Vehicles overtook longtime number two player Hyundai Motor India to become the secondand third-largest PV makers by volume in 2025, with the South Korean arm slipping to fourth position.
As per an industry insider, Hyundai, unlike Mahindra or Tata, focuses on profitability rather than market share. Also retail push, 2025 stock clearance and discounted pricing remain key drivers for the sales high.
SUVs continued to enjoy strong traction, going up to 55.8 per cent of total PVs sold in India from 53.8 per cent in 2024, even as small cars showed signs of recovery in the GST 2.0 era. Maruti Suzuki India clocked wholesales of 18.44 lakh units in 2025, bettering its previous highest of 17.90 lakh units registered in 2024, senior executive officer, marketing & sales, Partho Banerjee, told reporters in an interaction.
For the industry, he said, 2025 total sales is estimated at 45.5 lakh units against 43.05 lakh units clocked in 2024.
Factors such as GST reduction, coupled with income tax relief on income of up to Rs 12 lakh and repo rate cuts, helped the auto industry performance in 2025, he noted.
“We need to split 2025 into two halves - pre GST and the post GST... it is a combination of these things which has really pepped up the market from the month of October onwards,” Banerjee said.
Similarly, Tata Motors Passenger Vehicles MD-CEO Shailesh Chandra said CY25 saw steady progress for the PV industry, powered by a growing preference for SUVs and accelerating adoption of cleaner, emission-friendly powertrains.
For Tata Motors Passenger Vehicles, he said, “The momentum sparked by the roll-out of GST 2.0 in late Q2 FY26 gained further traction in Q3, resulting in several new records...it was the fifth consecutive year of record-breaking annual sales, with 5,87,218 units sold, including the highest-ever EV volumes of 81,125 units in a calendar year.”
Though the sales figures have caught everyone by surprise, VG Ramakrishnan, managing partner, Avanteum Advisors LLP, points to the sales of high-end vehicles. “These are big-ticket items and though second half sales typically go up by 10 per cent as historically shown due to festive season or pent-up demand, the current exuberance being shown remains unexplained.”
The year change factor already depreciates a vehicle by 15 per cent. Perhaps, dealer discounts could have taken place but this non-impulsive shopping is definitely not due to pent-up demand as in the case of COVID times, he said, adding that one would have to wait and see if the current growth can be sustained.