India Passenger Vehicle Sales Rise 4.4 Percent in September on Festive Boost

India’s passenger vehicle (PV) market showed steady growth in September 2025, with sales rising 4.4% year-on-year to 3.72 lakh units. The growth was mainly fueled by early festive season demand, improving supply chains, and rising rural consumption.

Festive Season Lifts Sales

September traditionally marks the start of India’s festive buying period, and this year was no exception. Early Navratri bookings increased showroom traffic, boosting dealership activity across the country. Compact and mid-size SUVs were the main drivers, as buyers preferred spacious, safe, and feature-rich vehicles. On the other hand, entry-level hatchbacks faced limited demand due to rising fuel costs and affordability concerns, particularly in rural and semi-urban markets.

Automaker Performance

Several automakers reported strong sales in September:

• Maruti Suzuki: Saw modest volume growth led by Brezza and Grand Vitara.

• Tata Motors: Continued steady momentum with Nexon and Punch driving compact SUV sales.

• Mahindra & Mahindra: Achieved double-digit growth supported by Scorpio and XUV700 demand.

• Hyundai and Kia: Maintained stable sales with Creta and Seltos as top models.

• Toyota: Benefited from growing interest in hybrids like Hyryder and Innova Hycross.

Dealer inventories have improved but remain slightly high ahead of Diwali, as automakers anticipate strong festive sales in October and November.

Industry Outlook

Experts expect passenger vehicle sales to remain firm over the coming months. New model launches, attractive festive offers, and stable financing rates are likely to support growth. However, rising ownership costs such as insurance and fuel could limit demand for budget cars. Overall, with rural demand picking up and SUVs continuing to be popular, the industry is projected to close FY26 with mid-single-digit volume growth.

Conclusion

The passenger vehicle market in India is showing signs of renewed strength, driven by festive demand and improving consumer confidence. While small car sales face pressure, strong SUV demand and new launches provide optimism for the second half of FY26. Long-term stability will depend on rural income growth and fuel price trends after the festive season.

Sources

FADA

SIAM

Company Reports