India’s vehicle sales hit record high in October, but one segment lagged behind

India’s auto retail sales soared to record highs in October 2025, powered by the rollout of GST 2.0 reforms, robust festive demand, and a sharp recovery in rural markets, industry body Federation of Automobile Dealers Associations (FADA) said on Friday.

Overall vehicle retail sales jumped 40.5% year-on-year, marking the highest-ever October performance, as passenger vehicles (PV) and two-wheelers (2W) both clocked lifetime highs, FADA said in a statement.

Two-wheeler sales surged 51.76% to 31.5 lakh units, while passenger vehicle retails rose 11.35% to 5.57 lakh units, the highest ever in India’s retail history.

Commercial vehicle (CV) sales grew 17.7%, tractors by 14.2%, and three-wheelers by 5.4%, while construction equipment (CE) sales fell 30.5%, it said.

“October’25 will be remembered as a landmark month for India’s auto retail, where reforms, festivities, and rural resurgence came together to deliver record-breaking results,” FADA President C S Vigneshwar said.

After a muted September due to the GST 2.0 transition, October, he said, saw a “hurdle-race-style rebound” as pent-up demand met festive sentiment and tax-cut excitement.

According to FADA, GST rate cuts, especially for entry-level two-wheelers and small cars, boosted affordability and first-time buying.

Passenger vehicle sales in rural areas grew three times faster than urban markets, while two-wheeler sales in rural regions nearly doubled urban growth, FADA said, citing strong monsoons, higher farm incomes and government infrastructure spending as key enablers.

Festive period delivers all-time highs

During the 42-day festive period covering Dussehra and Diwali, vehicle retail sales rose 21% from a year earlier, also an all-time festive high. Two-wheelers grew 22%, passenger vehicles 23% and commercial vehicles 15%, while construction equipment sales fell 24%.

“The twin festivals coinciding with the GST 2.0 rollout created a ‘Viksit Bharat moment’ — a perfect alignment of policy reform, festive sentiment, and rural revival,” FADA said.

Outlook

FADA said the near-term outlook remains “decisively positive”, supported by GST 2.0 reforms, harvest-linked rural cash flows, marriage season demand, and new model launches.

A dealer survey showed 64% expect growth in November, while 27% anticipate stable trends and only 8% foresee a decline. For the November–January period, 70% expect continued expansion.