Festive Surge & GST 2.0 Drive India’s Auto Retail to Record Highs: FADA

India's automobile retail sector witnessed an unprecedented surge in October 2025, registering a 40.5% year-on-year growth to over 40.23 lakh units, the highest monthly figure ever recorded. 

The Federation of Automobile Dealers Associations (FADA) attributed this remarkable performance to the timely rollout of GST 2.0 reforms, and extended festive season with Dussehra and Diwali.

Two-Wheelers Lead

Two-wheelers emerged as the star performer, clocking 31.49 lakh units: a staggering 51.76% increase over October 2024 and an all-time monthly record. Dealers reported exceptional footfalls, especially in rural areas where growth nearly doubled urban rates. GST rate cuts on entry-level models made scooters and commuter bikes more affordable, spurring first-time buyers. 

Rural liquidity from harvest cashflows and wedding season further amplified demand, with conversions hitting peak levels. Electric two-wheelers also gained traction, reflecting shifting preferences towards greener options.

Passenger Vehicles Breach 5.57 Lakh Mark

Passenger vehicles (PV) scripted history by crossing the five-lakh barrier for the first time, retailing 5.57 lakh units: up 11.35% YoY. This record was fuelled by GST reductions on small cars, making ownership attainable for middle-class families. Rural PV sales grew three times faster than urban markets, underscoring India’s rising purchasing power. 

Inventory levels corrected by 5-7 days to 53-55 days, easing dealer pressure. Compact SUVs and sub-4-metre sedans saw maximum traction, with enquiries converting swiftly amid festive schemes and policy-driven affordability.

Rural India Becomes the Growth Engine

FADA highlighted "Bharat driving auto retail growth", with rural areas outpacing urban centres significantly. Strong infrastructure spending, improved farm incomes, and government initiatives created a perfect storm of demand. Dealers noted that rural buyers advanced purchases to avail GST benefits, turning October into a "hurdle-race rebound" after a muted September.

42-Day Festive Period Delivers All-Time High

The extended 42-day festive window (Navratri to Bhai Dooj) saw overall retails jump 21% YoY to 52.38 lakh units: the highest festive tally ever. Two-wheelers grew 22%, while PVs rose 23%, creating what FADA President C.S. Vigneshwar called it a "Viksit Bharat moment" of policy reform, festive cheer, and rural revival.

Other Segments Show Mixed Results

Commercial vehicles expanded 17.7% to 1.07 lakh units, aided by freight movement and infrastructure activity. Three-wheelers grew modestly at 5.4%, while tractors rose 14.2%. Construction equipment, however, declined 30.5% due to project delays.

Dealer sentiment remains upbeat, with 64% expecting November growth and 70% forecasting expansion through January 2026. Marriage season, harvest inflows, new launches, and sustained GST 2.0 benefits are likely to maintain momentum. 

FADA emphasised that simpler taxation has not only boosted sales but also reinforced consumer confidence, positioning the sector firmly for a strong finish to 2025 and entry into 2026.

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