Record Surge in India's Passenger Vehicle Dispatches: What It Means for the Auto Sector

Passenger Vehicle Dispatches Reach New Heights

New Delhi: In the fiscal year 2025, India witnessed an unprecedented rise in passenger vehicle dispatches, surpassing 4.3 million units, with utility vehicles making up 65% of these sales, according to the Society of Indian Automobile Manufacturers (SIAM).

The total number of passenger vehicle dispatches reached 4,301,848 units, reflecting a 2% increase from the previous year's 4,218,750 units.

SIAM noted that the growth was tempered by the high sales figures from FY24, which set a challenging benchmark.

Utility vehicles have been the primary growth driver, increasing their share of total passenger vehicle sales from approximately 60% in FY24 to 65% in FY25.

Sales of utility vehicles surged by 11% to 2,797,229 units, compared to 2,520,691 units in FY24.

Conversely, passenger car sales experienced a decline of 13%, dropping to 1,353,287 units from 1,548,947 units in the previous fiscal year.

The passenger vehicle sector also achieved record exports, totaling 770,000 units, marking a 15% increase from FY24, driven by the global demand for models produced in India.

In the two-wheeler segment, dispatches rose by 9% to 19,607,332 units, up from 17,974,365 units in FY24, fueled by improved rural demand and consumer confidence.

Scooters led the growth in two-wheelers, benefiting from better connectivity in rural and semi-urban areas and the introduction of new models with advanced features.

Notably, electric vehicles (EVs) now account for over 6% of total two-wheeler sales in the fiscal year 2024-25.

Two-wheeler exports also saw significant growth, increasing by 21% compared to FY24.

In contrast, total commercial vehicle wholesales fell by 1% to 956,671 units from 968,770 units in the previous fiscal year.

Three-wheeler dispatches, however, rose by 7% to 741,420 units, compared to 694,801 units in FY24.

SIAM President Shailesh Chandra remarked that the Indian automobile industry maintained steady performance in FY25, supported by strong demand, infrastructure investments, favorable government policies, and a focus on sustainable mobility.

While passenger vehicles and three-wheelers experienced moderate growth due to the high base effect, both categories achieved record sales, and the two-wheeler segment showed robust growth.

Chandra noted that commercial vehicles faced a slight decline in FY2024-25, although recent months have shown improved performance.

On the export front, a strong recovery was observed across all segments, particularly in passenger vehicles and two-wheelers, indicating enhanced global demand and India's growing competitiveness.

Looking forward, Chandra expressed optimism that stable policy conditions, along with recent reforms in personal income tax and rate cuts by the RBI, would bolster consumer confidence and demand across all segments.

Overall, sales across all categories increased by 7% to 25,607,391 units in FY25, compared to 23,857,411 units in FY24.

In March alone, passenger vehicle dispatches rose by 4% year-on-year to 381,358 units.

Two-wheeler sales increased by 11% year-on-year to 1,656,939 units, while three-wheeler dispatches grew by 10% to 62,813 units compared to March 2024.

SIAM anticipates that all segments will maintain their growth trajectory in the current fiscal year, building on the strong performance of recent years, supported by stable macroeconomic conditions, proactive government policies, and infrastructure investments.

A normal monsoon, as forecasted for 2025, is expected to further stimulate economic activity, particularly in rural and semi-urban areas, which will positively impact auto sector demand.

The sector is also poised to benefit from personal income tax reforms introduced in the recent Union Budget for 2025-26, along with two consecutive rate cuts by the RBI, which are expected to enhance vehicle financing accessibility.

Additionally, export demand in key markets, including Africa and neighboring countries, is likely to remain strong as 'Made in India' vehicles gain popularity.

SIAM concluded by stating that the automobile industry will closely monitor macroeconomic factors and global geopolitical developments, which will influence demand conditions and supply chain dynamics in the future.