Indian carmakers experienced a significant surge in sales during December 2025, marking the largest monthly increase of the year. This boost was primarily fueled by tax cuts that made vehicles more affordable, thereby stimulating demand across various segments.

Industry data indicates that sales to dealers jumped by 26.8% in December. Total sales for the month reached approximately 399,000 units. The Society of Indian Automobile Manufacturers (SIAM) reported that the full year sales grew by about 5%, which is faster compared to the 4.2% growth recorded in 2024.

Several factors contributed to this robust performance. The rationalization of GST rates in September 2025 played a crucial role in improving affordability, particularly in the entry-level segments. Lower interest rates for financing and overall better affordability also sustained demand even after the festive season concluded. Additionally, year-end promotional offers and pre-buying in anticipation of January price hikes further boosted sales.

Maruti Suzuki India Limited (MSIL), the country's largest passenger car manufacturer, reported sales of 217,854 units in December 2025, a 22.3 percent year-on-year increase. Domestic sales for Maruti Suzuki reached an all-time high of 182,165 units. Tata Motors also experienced substantial growth, with sales of 50,519 units, a 14.1 percent increase compared to the previous year. Electric vehicle (EV) volumes for Tata Motors rose sharply by 24.2 percent to 6,906 units, highlighting the company's strong position in the EV market. Mahindra & Mahindra reported a 23 percent year-on-year increase with sales of 50,956 units.

Other manufacturers also saw significant gains. Toyota Kirloskar Motors Limited reported sales of 39,333 units, a 33 percent increase. Kia India recorded its best-ever December sales since entering the Indian market, selling 18,659 units, which is a 105 percent increase year-on-year. Hyundai Motors India Limited, however, experienced a more modest growth of 6.6 percent with total sales of 58,702 units. JSW MG Motors Limited sold 6,500 units, reflecting a growth of 38 percent.

The Federation of Automobile Dealers Associations (FADA) noted that the year exhibited a two-phase pattern, with a subdued performance in the first eight months followed by a significant acceleration from September to December. December 2025 recorded a robust 14.63% year-on-year growth in retail volumes, reaching 2.029 million units. A notable trend was the outperformance of rural markets in passenger vehicle sales, growing by 12.31% compared to 8.08% in urban areas, indicating an expanding reach of personal mobility.

Overall, the Indian automotive sector concluded 2025 on a strong note, driven by improved macroeconomic conditions, positive rural sentiment, and supportive policy interventions such as GST rate rationalization. While some automakers remain cautious due to signs of cooling demand and rising competition, the industry's performance in December reflects renewed consumer confidence and favorable market conditions.