India’s Light Vehicle (LV) wholesales recorded a fourth consecutive annual high in 2025, marking a strong recovery trajectory following the pandemic-affected years of 2020-21. The market demonstrated notable resilience despite multiple headwinds, including periodic volatility, geopolitical uncertainties, and a persistently depreciating rupee.
Total LV wholesales reached an all-time high of 5.2 mn units in 2025, representing a 6% year-on-year (YoY) rise. Passenger Vehicle (PV) sales increased by 6% YoY to 4.5 mn units, while Light Commercial Vehicle (LCV) volumes (≤6T gross vehicle weight) also expanded by 6% YoY to 733k units, underscoring broad-based growth across segments.
The year was clearly a “two-halves” story. Volumes remained relatively muted between January and August, reflecting cautious consumer sentiment and affordability pressures. This was followed by a distinct upshift from September through December, driven by the rollout of GST 2.0 reforms, which improved affordability, lifted consumer sentiment, and accelerated purchase decisions. The strong finish was reinforced by a record December performance, with LV wholesales exceeding 400k units for the first time, reaching 461k units (+25% YoY). PV volumes rose by 26% YoY to 399k units, while the LCV segment grew by 18% YoY to 62k units, providing strong momentum heading into 2026.
PV registrations reached 4.5 mn units during full-year 2025 (+10% YoY), while LCV retail volumes rose by 9% to 611k units, according to FADA. In December, PV retail sales fell by 4% month-on-month (MoM), and LCV sales declined by 13% MoM. Despite this, LV retail volumes increased by 26% YoY, reflecting resilient demand, supported by post-GST 2.0 sentiment, year-end offers, and pre-buying ahead of expected January price hikes. By the end of December, PV dealer inventories tightened further to around 37-39 days, down 7 days from 44–46 days in November, as reported by FADA.
Looking ahead, demand should remain supportive in 2026, driven by GST reductions, improving disposable income, and positive rural indicators. Strong enquiry pipelines, CY2026 launches, and marriage-season demand, supported by crop-led liquidity, should sustain momentum, although select OEM price hikes in Q1 2026 may trigger some near-term pre-buying.
Against this backdrop, we have marginally upgraded our outlook for the Indian LV market. Sales are forecast to grow by over 6% in 2026, reaching around 5.5 mn units, supported by healthy demand and a robust product pipeline. PV volumes are expected to rise by 7% YoY, while LCV sales are projected to grow by 3% YoY during the year. Over the longer term, total LV sales are anticipated to reach around 6.5 mn units by 2032. We will, however, reassess the outlook in February, factoring in the Union Budget and developments around potential trade agreements and FTAs.
