Demand sustains beyond festive season: GST 2.0 cuts, retail offers aid November auto market performance

The near-term outlook for the Indian automotive industry is supported by improving rural sentiment and favourable macro indicators.

Buoyed by Goods and Services Tax (GST) rate rationalisation and offers from original equipment manufacturers (OEMs) and dealers, the Indian automotive sector avoided the conventional post-festive slowdown, with demand holding above seasonal expectations and lifting overall retail volumes by more than 2% year-on-year (y-o-y) in November 2025.

According to data from the industry body Federation of Automobile Dealers Associations (FADA), the industry-wide retail sales, including those of passenger vehicles (PVs), two-wheelers, three-wheelers, commercial vehicles (CVs), tractors and construction equipment (CE), rose 2.14% y-o-y to 33,00,832 units last month.

"November 2025 defied the conventional post-festive slowdown, delivering a resilient performance despite an unusually high comparative base. Traditionally, auto retail eases in the month following the festival cycle; however, this year, most festive registrations were completed in October 2025 itself, unlike November 2024, when Deepawali and Dhanteras fell towards the end of October 2024, and vehicle registrations happened in November 2024, which lifted volumes significantly," said C S Vigneshwar, President, FADA.

"Even with this shift, the industry closed November 2025 at a y-o-y growth of 2.14%, reaffirming customer confidence and the structural strength of India's auto retail market. GST rate cuts coupled with OEM-dealer retail offers continued pulling customers to showrooms, enabling sustained footfalls beyond the festive period. Price reductions across categories, which ignited strong buying in October, continued to support conversions in November as well," he added.

Some carmakers were furnishing offers to the tune of Rs 2 lakh on select models.

Segment-wise performance

The PV segment was driven by model availability, compact SUV push and year-end deals, resulting in a sharp inventory correction to 44-46 days in November 2025 from 53-55 days in the previous month. The retail jumped 19.71% y-o-y to 3,94,152 units.

However, the two-wheeler segment witnessed a slight decline of 3.10% y-o-y to 25,46,184 units as retail shifted to October 2025 due to festive buying. The support came from positive GST sentiments, electric vehicle (EV) traction, rural enquiries and a healthy marriage season demand.

The three-wheeler sales rose 23.67% y-o-y to 1,33,951 units in November 2025. The CV segment posted a growth of 19.94% y-o-y to 94,935 units as select infrastructure activities, freight movement, tourism mobility, government tender cycles and GST reforms positively influenced the retail even as fleet utilisation remained uneven in select markets.

While the tractor retails climbed 56.55% y-o-y to 1,26,033 units, the CE segment registered a decline of 16.51% y-o-y in sales to 5,577 units.

Near-term outlook

Vigneshwar said that the near-term outlook is supported by improving rural sentiment and favourable macro indicators as there is a strong start to the Rabi season, with sowing crossing 39.3 million hectares, significantly ahead of last year, driven by robust soil moisture conditions, better seed availability and supportive MSP signals.

"Wheat, pulses and oilseeds have recorded sharp acreage expansion, signalling improved farm income prospects. Simultaneously, the IMD's forecast of a colder-than-normal winter across the northern and central plains is expected to boost mobility needs and logistics activity. There are good signs of volume recovery across FMCG, tractors, and rural two-wheeler markets. These developments, along with GST 2.0 rate cuts and sustained OEM-dealer offers, are expected to support demand continuity into December 2025," he added.