GST 2.0 lifts PV sales to record 5.57 lakh units; 2W retail up 52% in October: FADA

October 2025 will go down as the month that redefined records for India’s automobile retail industry. The Federation of Automobile Dealers Associations (FADA) on Friday reported that total vehicle registrations surged a whopping 40.5 per cent year on year to 40.24 lakh units, marking the highest-ever monthly volume across categories.Both two-wheelers and passenger vehicles hit lifetime highs, while the 42-day festive window between Dussehra and Diwali also set new growth benchmarks.Segment-wise, passenger vehicles rose 11.4 per cent to a record 5.57 lakh units, while two-wheelers surged 51.8 per cent year on year to 31.5 lakh units. Commercial vehicles expanded 17.7 per cent, tractors were up 14.2 per cent, and three-wheelers grew 5.4 per cent. The only laggard was the construction equipment segment, which fell 30.5 per cent over last year.“October 2025 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,” said C S Vigneshwar, President, FADA.

“Overall retail sales grew by a robust 40.5 per cent as both passenger vehicles and two-wheelers achieved lifetime highs, signalling renewed consumer confidence and strong economic undercurrents,” he added.

A landmark month for the Industry

After a relatively quiet September, which saw muted footfalls during the early GST 2.0 transition phase, October brought a sharp rebound. FADA likened it to a “hurdle race”, where pent-up demand, festive sentiment and tax-cut excitement passed the baton to one another, propelling India’s vehicle retail industry to its highest-ever monthly tally.

Inventory levels in the passenger vehicle market eased by five to seven days, settling at 53 to 55 days, suggesting improved supply alignment and sustained retail pull. Dealers across India reported record enquiries, higher footfalls and better conversion rates compared with previous festive seasons.

Maruti, Tata, and Mahindra top the charts

Among passenger vehicle manufacturers, Maruti Suzuki retained leadership with 42.98 per cent market share, followed by Tata Motors at 13.52 per cent, and Mahindra & Mahindra at 12.19 per cent. Together, the three accounted for nearly seven out of ten cars sold in the month.

In two-wheelers, Hero MotoCorp led the pack with 31.58 per cent, followed by Honda Motorcycle & Scooter India (26.10 per cent) and TVS Motor (17.72 per cent). In the commercial vehicle segment, Mahindra led with about 34.5 per cent, ahead of Tata Motors (32.3 per cent) and Ashok Leyland (15.3 per cent).

GST 2.0 sparks affordability wave

The rollout of GST 2.0 turned out to be the most important catalyst in India’s record-breaking October. The reduction in GST rates for entry-level two-wheelers and small cars directly expanded affordability and encouraged first-time buyers to act quickly ahead of Diwali.

“The introduction of GST 2.0 proved transformational,” FADA noted in its report.

“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,” the report added.

The new tax regime, built on the principle of “Simpler Tax, Stronger Growth,” is being seen as a long-term enabler of middle-class consumption. For automakers and dealers alike, GST 2.0 created the perfect environment for volume acceleration, enabling entry segments to rebound while also strengthening the small SUV and CNG vehicle categories.

Bharat leads the charge

If GST 2.0 set the stage, rural India delivered the performance. FADA described October as the “rise of Bharat”, marking a structural shift in India’s demand map. A favourable monsoon, better farm incomes, and government-led infrastructure spending all contributed to higher purchasing power outside metros and tier-one cities.

“Rural India became the true growth engine,” the association said. “Rural passenger vehicle sales grew over three times faster than urban, while rural two-wheeler growth nearly doubled urban rates, marking a structural shift in the demand map of India’s auto sector.”

Dealers across tier-two and tier-three towns reported unprecedented buyer enthusiasm for commuter bikes, scooters, and compact cars. Rural markets not only outpaced urban growth but also showed strong demand for CNG and ethanol-based vehicles, reflecting rising awareness around affordability and fuel efficiency.

A festive period that redefined momentum

The 42-day festive period, spanning from 22 September to 2 November 2025, amplified the momentum. Total vehicle registrations grew 21.1 per cent year on year to an all-time high of 52.38 lakh units. Two-wheelers grew 21.8 per cent, passenger vehicles 23.4 per cent, commercial vehicles 15 per cent, and tractors 14.2 per cent.

“The 42-day festive period of 2025 stands as a defining milestone for India’s auto retail, delivering the highest-ever sales and growth across categories,” said Vigneshwar. “This festive season was unique — Dussehra and Diwali falling in the same month coincided perfectly with the rollout of the new GST framework. Together, they ignited demand across Bharat’s heartlands.”

Dealers described the period as the best festive season in recent memory, with record enquiries, stronger liquidity, and buyers advancing purchases to benefit from lower GST and attractive festive offers.

Measured optimism ahead

Looking ahead, FADA’s dealer survey reflects strong near-term optimism. About 64 per cent of dealers expect growth in November, while 70 per cent foresee expansion over the next three months. Liquidity conditions are healthy, aided by robust financing activity and improving margins.

“GST 2.0 continues to anchor affordability under the vision of Simpler Tax, Stronger Growth,” FADA said. “Marriage season, harvest cashflows and new launches will sustain momentum through the year-end.”

The federation believes India’s auto retail is entering 2026 on a firm, confident footing, supported by reforms, robust rural incomes, and a renewed consumer appetite for mobility. October 2025, it concluded, will be remembered as the month when policy, prosperity, and the people of Bharat came together to power the strongest festive season in Indian automotive history.