GST cut-fueled festive fever saw one car sold every two seconds

GST cut brought cheer to the auto sector

The 42-day festive period turned out to be a blockbuster season for the automotive sector with sales at record levels. The period from Navratri to Diwali saw the industry retail one car every 2 seconds and almost 3 two-wheelers every second even as dealers struggled to meet vehicle delivery deadlines.

The combination of festive demand and rationalization of goods and services and tax (GST) rates helped the automotive industry record its best festive season to date. As consumers flocked to showrooms, dealers across the country kept their dealerships open much beyond their usual business hours.

Nearly 767,000 passenger vehicles (cars, sport utility vehicles, and vans) and 4.05 million two-wheelers (motorcycles, scooters, and mopeds) were sold during the period, averaging 18,261 PVs and 96,500 two-wheelers per day.

As per data shared by the Federation of Automobile Dealers Association (FADA), the PV segment recorded a growth of 23% while the two-wheeler segment saw growth of 22% during this year’s festive period compared to the same period in the previous year.

This surge in volumes pushed revenues too to record levels. The PV segment is estimated to have generated a turnover of Rs 76,700-84,400 crore while the two-wheeler segment is estimated to have generated a turnover of Rs 36,500-40,500 crore. This is as per FADA’s estimate of a price of Rs 10-11 lakh per car and Rs 90,000-1 lakh per two-wheeler.

Speaking to Moneycontrol, CS Vigneshwar, President, FADA said, “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.”

“Dealers nationwide reported record enquiries, higher conversions, and a palpable sense of optimism as customers advanced their buying decisions to benefit from reduced GST rates and attractive festive schemes,” he added.

Rural Markets Shine

A look at the finer details of the demand trend throws an interesting picture. Retail sales growth in the rural markets was 3 times for PV and 2 times for two-wheeler compared to the urban market.

A rich agricultural harvest thanks to the bountiful monsoon coupled with easy vehicle and finance availability helped automakers make the most of rural demand. For the first time in FY26, the share of car and SUV sales from rural areas crossed 40% to settle at nearly 42%. The average share in FY24 and FY25 of rural markets was 38%, as per FADA.

A major factor for the tide turning in favour of the rural market was the spike in demand for small cars. Maruti Suzuki, the car market leader, saw its retail market share jump to 43% in October from under 41% recorded in the same month last year.

The trend was mirrored in the two-wheeler segment as well. Out of every five two-wheelers retailed during the period, three were bought in the rural areas, representing a share of 61%, which is the highest in several months.