‘Hurdle race style swift rebound’: Auto sales jump 40.5% in October after a quiet September


October has proven to be a “landmark month for India’s auto retail”, said Federation of Automobile Dealers Associations (FADA) President CS Vigneshwar. Reforms, festivities and rural resurgence together delivered record-breaking results for the auto industry. 

According to FADA, overall retail saw a jump of 40.5 per cent year-on-year, which is an all-time high, while two-wheelers grew 51.76 per cent, passenger vehicles 11.35 per cent, three-wheelers 5.4 per cent, and commercial vehicles 17.7 per cent on-year.

From a quiet September, October saw a “swift rebound – almost like a hurdle race where pent-up demand passed the baton to festive sentiment and tax-cut excitement, propelling sales to historic levels,” said Vigneshwar.

The surge in two-wheelers was due to rural demand, GST reductions, and the festive rush. Passenger vehicles also grew to the highest ever in retail history, with inventory levels easing by 5-7 days to 53-55 days.

“The introduction of GST 2.0 proved transformational – lowering small-car GST rates made vehicle ownership more attainable, especially for the cost-sensitive first time buyer. This affordability boost, timed perfectly with the festive season, turned sentiment into action,” said Vigneshwar. Meanwhile, rural India proved to be the real growth engine. Favourable monsoons, higher farm incomes, and government infrastructure pushed driving purchasing power. 

FESTIVE PERIOD

The auto retail sector recorded unprecedented growth during the 42-day festive period in 2025, as overall vehicle retails surged by 21 per cent year-on-year, marking the highest sales across all categories. The alignment of Dussehra and Diwali in the same month with the introduction of the GST 2.0 reforms created a unique environment that significantly boosted demand nationwide, said Vigneshwar. Dealers across the country reported a notable increase in enquiries and higher conversion rates, as buyers took advantage of reduced GST rates and attractive festive offers.

Segment-wise, two-wheeler sales increased by 22 per cent year-on-year, attributed to improved rural sentiment, enhanced liquidity, and increased affordability from GST rationalisation. Dealers described this as the strongest festive season in recent memory, noting robust demand in commuter bikes and scooters, alongside rising interest in electric vehicles.

Passenger vehicle retails grew by 23 per cent year-on-year, achieving an all-time festive high. The GST 2.0 initiative, which targeted affordability and sought to boost middle-class consumption, manifested in a resurgence in compact and sub-4-metre car sales. Dealers reported that in several models, retail demand outpaced supply.

Other categories also registered growth: commercial vehicles rose by 15 per cent year-on-year, supported by increased freight activity and infrastructure expansion, while tractors and three-wheelers grew by 14 and 9 per cent, respectively. However, construction equipment sales declined by 24 per cent, attributed to project delays and financing constraints. 

Vigneshwar said, “This season’s success has reaffirmed that the GST 2.0 reform is not just a tax simplification, but a catalyst for consumer-led growth and national prosperity. It has lowered ownership costs, energised Bharat’s economy, and rekindled aspiration in every segment of society.”

NEAR-TERM OUTLOOK

FADA indicated that the industry expects the momentum from the festive surge to extend into November, though with a natural moderation after an all-time-high October. Two-wheeler dealers foresee steady demand backed by rural liquidity, wedding-related purchases, and spillover from festive bookings, aided by GST benefits and improved sentiment. Passenger vehicle dealers report a strong pipeline of undelivered festive bookings, better stock availability, and continued traction from the GST price.