The Indian automotive industry ended December 2025 on a firm footing, with year‑on‑year gains across most segments and signs of an early cycle recovery in commercial vehicles, according to a report from Asit C. Mehta Investment Interrmediates Limited (ACMIIL).
Indian auto sector shows broad-based year-on-year strength
Improved macroeconomic conditions, better rural sentiment and policy tailwinds supported demand even after the festive season. The report cites recent GST rate rationalisation, lower borrowing costs and enhanced affordability as key factors sustaining retail traction and wholesale activity.
Passenger vehicles remained a primary growth engine. Maruti Suzuki recorded a 22.2 per cent year‑on‑year rise in total wholesales for December, with domestic volumes up 36.4 per cent. The mini car segment recovered sharply following the September GST rationalisation, and pending bookings were reported at roughly one to one-and-a-half months. Mahindra & Mahindra continued to lead in the utility vehicle space, recording domestic utility vehicle volume growth of 23 per cent.
Not all manufacturers performed uniformly. Hyundai was noted as the weakest performer in December 2025, with total wholesales rising 6.6 per cent year‑on‑year despite robust export volumes.
Two‑wheelers showed divergent results among top players. TVS Motors delivered an impressive 47.8 per cent year‑on‑year increase in wholesales, reflecting sustained wholesale outperformance. Royal Enfield posted 30.3 per cent growth driven by its sub‑350cc portfolio. Hero MotoCorp’s reported 40.5 per cent gain was observed to be on a very low base from the prior year, with retail traction for the month described as weak. Bajaj Auto’s 14 per cent rise was largely export led, while domestic volumes lagged the broader industry.
The commercial vehicle sector appears to be entering an upcycle, with strong volumes recorded for a second consecutive month. Mahindra & Mahindra reported total commercial vehicle volumes up 34.4 per cent, Tata Motors rose 25.5 per cent and Ashok Leyland increased 27 per cent. Analysts expect momentum to accelerate into the next quarter as policy initiatives and infrastructure projects underpin logistics demand.
Tractor and three‑wheeler sales also maintained healthy growth. Tractor demand benefited from higher Rabi sowing, supportive minimum support prices and improved farm sentiment; Mahindra and Escorts Kubota each reported year‑on‑year growth in excess of 38 per cent. In the three‑wheeler segment, TVS led with a 109.8 per cent increase, noting that the comparison was against a heavily impacted base in the previous year.
Looking ahead, the ACMIIL report emphasised that macro conditions remain supportive. It cautioned that pricing announcements will merit close attention to assess potential impacts on volumes and margins amid rising commodity costs.
Overall, December closed the calendar year with robust year‑on‑year performance across multiple categories, suggesting a healthy start point for the automotive industry as it moves into 2026.
Key Takeaways:
- Indian auto sector closed December 2025 with strong year-on-year growth across passenger vehicles, two‑wheelers, commercial vehicles, tractors and three‑wheelers.
- Tailwinds such as GST rationalisation, lower interest rates and improved rural sentiment supported sustained demand.
- Leading manufacturers including Maruti Suzuki, M&M, TVS and Royal Enfield reported significant wholesale gains, while some exporters drove growth for others.
