Wednesday, 12 Nov, 2025
Photo courtesy: Pixabay
October’s record-breaking run signals more than festive cheer—it marks a rare convergence of tax reform, consumer confidence, and easy credit. Lower taxes, improved liquidity, and aggressive promotions converted optimism into sales
The automobile market roared to record highs in October, powered by the twin engines of festive-season demand and a fresh round of tax reforms that lifted consumer sentiment. Passenger vehicle (PV) and two-wheeler sales soared to their best-ever monthly levels, highlighting a revival in discretionary spending and rural purchasing power that had been missing since the pandemic.
According to data from the Federation of Automobile Dealers Associations (FADA), PV sales rose 11 per cent from a year earlier to 557,000 units. Two-wheeler sales jumped 52 per cent to 31.5 lakh units—the highest ever recorded for a single month. Commercial vehicle (CV) sales climbed 18 per cent, backed by strong freight demand and government-led infrastructure projects, while three-wheeler and tractor sales gained 5 per cent and 14 per cent, respectively. The lone weak spot was the construction equipment segment, which slumped 30 per cent year-on-year as project delays and tighter financing hit demand.
The festive stretch from Navratri to Diwali produced the highest retail vehicle sales India has ever seen, up 21 per cent from last year. FADA president CS Vigneshwar called the performance “historic,” crediting it to pent-up demand and the government’s latest tax overhaul.
GST 2.0 and affordability boost
The GST 2.0— a reform package that lowered tax rates on small cars — has played a key role in reviving affordability and luring first-time buyers back to showrooms. By simplifying the tax structure and reducing levies on entry-level models, the government effectively made vehicle ownership attainable for millions of price-sensitive consumers just as festival-season discounts hit the market.
“This affordability boost, timed perfectly with the festival season, turned sentiment into action,” said Vigneshwar. Dealers also caught a break on the supply side. PV inventories fell by about a week to around 53–55 days, signalling healthier production alignment and lower stock pressure heading into the final quarter.
Market leaders extend lead
Market leader Maruti Suzuki India strengthened its dominance with an 18 per cent rise in sales to 239,000 units in October. Tata Motors posted a 13 per cent increase to 75,352 units, and Mahindra & Mahindra gained 9 per cent to 67,918 units. Hyundai Motor India was the only major automaker to record a decline, with sales down 7 per cent to 65,442 units, largely due to model transitions and capacity constraints.
In the two-wheeler space, Hero MotoCorp stood out as the biggest gainer. Its sales soared 72 per cent year-on-year to nearly one million units, up from 577,678 a year earlier. Honda Motorcycle & Scooter India saw volumes rise 48 per cent to 821,976 units, while TVS Motor Co. reported a 58 per cent increase to 558,075 units.
Rural India takes the driver’s seat
Beyond the big cities, India’s rural heartland powered much of October’s momentum. Improved monsoon patterns, stronger farm incomes, and stepped-up public spending on rural roads and housing helped turn “Bharat” into the true growth engine of the auto industry.
Rural India became the real driver of this revival, and PV sales in rural areas grew more than three times faster than in urban markets, and two-wheeler sales nearly doubled urban growth rates, indicating the demand is now more broad-based.
During the festive period, two-wheeler sales climbed 22 per cent over last year, passenger vehicles 23 per cent, commercial vehicles 15 per cent, three-wheelers 9 per cent, and tractors 14 per cent. Construction equipment, however, remained under strain, falling 24 per cent as project execution lagged and financing tightened.
A structural revival in motion
October’s record-breaking performance reflects more than just seasonal enthusiasm. It suggests a rare alignment of fiscal reform, consumer confidence, and liquidity. The tax overhaul has reduced costs for mass-market buyers, while improving credit flow and heavy festive promotions turned optimism into sales.
The key question now is whether this surge can outlast the festival glow. Automakers are heading into 2025 with leaner inventories, stronger balance sheets, and rising demand from small towns and villages—all signs that the rebound could be structural, not just cyclical.
Experts say October was not just a festive blip. It was a glimpse of what happens when policy, sentiment, and purchasing power finally move in the same direction.
If that alignment holds, the auto sector—long seen as a bellwether for the broader economy—may have entered a new growth phase, one that reflects the expanding aspirations of both its cities and its countryside.
