December, the last month of 2025, proved to be a strong finish for the Indian automobile industry. Data released by the Federation of Automobile Dealers Associations (FADA) shows a sharp rise in retail vehicle sales, with rural and semi-urban areas outperforming big cities.

Retail car sales in December grew by 26.64% year-on-year to 3,79,671 units. Demand in rural markets rose by a strong 32.40%, while urban markets recorded a comparatively lower growth of 22.93%. This trend clearly indicates that the demand for private vehicles is expanding rapidly beyond metro cities into villages and smaller towns.

Rural markets drive full-year growth

For the entire calendar year 2025, total vehicle retail sales increased by 9.70% to 44,75,309 units. During this period, rural markets saw a growth of 12.31%, whereas urban areas grew by 8.08%. The data highlights the automobile sector’s increasing reliance on non-metro and rural markets for sustained growth.

Strong growth across all vehicle segments

FADA President CS Vigneshwar said that India’s auto retail market ended the year on a very strong note. Total retail sales for the year stood at 2,81,61,228 units, registering a growth of 7.71% compared to the previous year.

He noted that although sales remained subdued from January to August, momentum picked up after September. The implementation of GST 2.0 helped reduce vehicle prices, which boosted consumer confidence. As a result, December turned out to be particularly strong, with total auto retail sales rising by 14.63% to 20,28,821 units.