Auto retail sales rise 6.5% in FY25, rural outpaces urban markets

Indian auto retail sales in FY25 grew, with rural areas outperforming urban regions across passenger vehicles and two-wheelers.

Overall automobile retail sales in FY25 (from April 2024 to March 2025) grew 6.46% over the previous year with passenger vehicles (PV) growing by 4.87%, two-wheelers (2W) retail sales rising 7.71% and commercial vehicles (CV) de-growing by 0.17%, according to data released by Federation of Automobile Dealers Associations (FADA) on Monday (April 7, 2025). 

While two-wheelers grew by 8.39% in rural markets, they grew 6.77% in urban areas. Three-wheelers in rural regions rose by 8.70%, significantly outpacing 0.28% growth in cities during the year. Passenger vehicles also performed better in rural belts with 7.93% growth, compared to 3.07% in urban markets, according to FADA.

For the month of March’25 the overall auto retail sales declined 0.7% year-on-year (YoY) but improved 12% month-on-month (MoM).

Early-month weakness (Kharmas period) was offset by a final-week surge (Navratri, Gudi Padwa, Eid, and year-end depreciation benefits).

Segment wise, two-wheelers de-grew 1.7%, three-wheelers de-grew 5.6%, tractors de-grew 5.7% while passenger vehicles and commercial vehicles grew 6% and 2.6% respectively year-on-year (YoY).

Passenger vehicle stock levels rose to 50–55 days, raising carrying costs, according to FADA.

FADA president, C.S. Vigneshwar said, “FY25 truly showcased how adaptable and resilient India’s auto retail sector can be. A key highlight this year was the strong performance in rural areas.”