Rural India Drives Car Sales Surge: CNG & EV Lead Demand, FADA Reports

• Rural markets are now the primary growth engine for India's auto industry, surpassing urban demand in December 2025.
• Passenger vehicle sales surged by 26.64% nationally in December 2025, with rural demand growing 32.40% compared to 22.93% in major cities.
• CNG and electric vehicles are increasingly preferred, accounting for 21.30% and 4% respectively of total car sales in 2025.
• GST 2.0 implementation, reducing taxes on small vehicles, made them more affordable and boosted sales, dispelling slowdown fears.
• FADA predicts continued sales growth in January 2026, driven by festivals like Sankranti, Pongal, and the wedding season.

Why It Matters: Rural India fuels auto sales growth, with CNG and EVs becoming popular choices, supported by policy changes.