New Delhi: Rural India emerged as the key growth driver for passenger vehicle sales in 2025, outpacing urban markets as demand expanded beyond major cities, data released by the Federation of Automobile Dealers Associations (FADA) on Tuesday showed.

The rural passenger vehicle sales grew 12 per cent during the year, compared with an 8 per cent rise in urban areas.

Total passenger vehicle sales climbed to 4.47 million units in 2025, up from 4.1 million units in 2024, the data said.

The data also pointed to a clear shift in India’s mobility mix, with nearly one-third of all passenger vehicles sold during the year running on alternate fuels such as CNG, hybrids and electric vehicles.

CNG-powered vehicles increased their share from 18 per cent to 21 per cent, while electric vehicles rose from 2.4 per cent to 4 per cent -- reflecting growing acceptance of cleaner mobility options.

Hybrid vehicle sales, however, slipped slightly to 8.2 per cent from 8.7 per cent last year. Petrol vehicle sales declined to 49 per cent from 52 per cent in 2024, while diesel vehicles remained unchanged at 18 per cent.

The strong rural trend was also visible in December, when passenger vehicle sales jumped 26.64 per cent year-on-year.

Rural sales during the month surged 32.40 per cent, well ahead of urban growth, highlighting rising mobility demand in non-metro regions.

Passenger vehicle sales stood at 3,79,671 units in December, compared with 2,99,799 units in the same month last year.

Explaining the rise in rural demand, FADA President C S Vigneshwar said a good harvest season and favourable monsoon supported rural incomes.

He added that higher minimum support prices, GST rationalisation, revised income tax slabs and four rate cuts by the Reserve Bank of India also helped boost rural buying sentiment.

Across vehicle categories, two-wheeler sales grew 7.24 per cent in 2025, passenger vehicles rose 9.70 per cent, commercial vehicles expanded 6.71 per cent, and tractor sales increased by 11.52 per cent.

Vigneshwar noted that while overall retail growth was broad-based, rural demand within passenger vehicles stood out clearly, growing faster than urban markets and signalling a wider spread of personal mobility.