Daijiworld Media Network - New Delhi
New Delhi, Jan 6: India’s passenger vehicle market in 2025 was propelled largely by rural demand, which grew faster than sales in urban centres, signalling a widening footprint of personal mobility beyond major cities, according to data released by the Federation of Automobile Dealers Associations (FADA).
Passenger vehicle sales in rural areas recorded a 12 per cent increase during the year, comfortably outpacing the 8 per cent growth seen in urban markets. Overall passenger vehicle volumes rose to 4.47 million units in 2025, up from 4.1 million units a year earlier.
The data also highlighted a notable transformation in the country’s vehicle fuel mix. Nearly one out of every three passenger vehicles sold during the year ran on alternative fuels, including CNG, hybrid and electric powertrains. The share of CNG vehicles rose from 18 per cent to 21 per cent, while electric vehicles gained momentum, increasing their share from 2.4 per cent to 4 per cent. Hybrid vehicles saw a marginal dip, accounting for 8.2 per cent of sales compared with 8.7 per cent last year.
Traditional fuel segments continued to lose ground. Petrol-powered vehicles declined to 49 per cent of total sales from 52 per cent in 2024, while diesel vehicles remained steady at 18 per cent.
The rural-led momentum was particularly evident in December, when passenger vehicle sales surged 26.64 per cent year-on-year. Rural markets registered a sharp 32.40 per cent jump during the month, significantly ahead of urban growth, underscoring rising demand in non-metro regions. Total passenger vehicle sales in December reached 3,79,671 units, compared with 2,99,799 units in the same month last year.
FADA President C S Vigneshwar attributed the strong rural performance to supportive economic conditions, including a healthy harvest season and favourable monsoon, which improved rural incomes. He also pointed to higher minimum support prices, GST rationalisation, revised income tax slabs and four interest rate cuts by the Reserve Bank of India as factors lifting buyer confidence in rural areas.
Looking at the broader auto market, two-wheeler sales increased by 7.24 per cent in 2025, passenger vehicles grew 9.70 per cent, commercial vehicles expanded 6.71 per cent, and tractor sales rose by 11.52 per cent.
Vigneshwar noted that while growth was visible across categories, the faster pace of rural passenger vehicle sales stood out, reflecting a deeper and more widespread adoption of personal mobility across India.