Indian auto's real test lies ahead after firecracker start to festive season

India’s carmakers had a bumper festive month, shifting into top gear in October as passenger vehicle dispatches crossed 5 lakh units for the first time, with Maruti Suzuki, Mahindra and Hyundai posting record monthly sales.

Domestic passenger vehicle wholesales are estimated at 5.25-5.3 lakh units in October, compared with 4.6 lakh units in the year-ago month. This would mark growth of around 13-15% despite a high base.

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Maruti Suzuki reported record monthly sales of 2,76,120 vehicles, up 25% year-on-year. Hyundai Motor India’s domestic wholesales rose 16.7% to 62,799 units. Mahindra & Mahindra also reported strong demand as the company's total vehicle sales grew 9% year-on-year to a record 13,1109 units.

"My take is, the industry should be between 5.25-5.3 lakh units," said Partho Banerjee, senior executive officer at Maruti Suzuki.

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In the commercial vehicle segment, Tata Motors reported a 27% rise in sales, while Ashok Leyland recorded 23% growth. Tractors, however, remained a weak spot, with Mahindra & Mahindra reporting a 12% decline in total sales. The company attributed the fall primarily to a shift in festive dates.

Festive demand supports dispatches

October’s growth comes against a high base. Last year, vehicle sales were subdued from mid-August to mid-September as buyers delayed purchases ahead of the GST rate cut. After the lower rates took effect in the last week of September 2025, demand rebounded, supporting sales through the festive season and into October.

This year, with Dhanteras and Diwali falling in the first half of November, October wholesales largely reflect automakers stocking up dealerships ahead of peak festive deliveries.

The shift in festive dates is also expected to affect retail registrations. October registrations are likely to decline against last year's high base, as a significant share of festive deliveries moves to November, said Gaurav Vangaal, associate director for Light Vehicle Production Forecasting at Mobility Global.

Emkay Global said the shift of Diwali from October last year to November this year had distorted year-on-year retail comparisons, masking healthy underlying demand.

"Strong festive demand, coupled with healthy momentum in both domestic and export markets, helped us set this new sales record," said Tarun Garg, managing director and CEO of Hyundai Motor India.

Growth faces post-festive test

While demand has remained resilient despite last year's tax-cut-led surge, analysts said the real test will come after the festive season. Rising input costs and supply constraints could weigh on growth in the coming months.

Emkay Global said it preferred two-wheeler and commercial vehicle makers over passenger vehicle companies, citing their greater ability to pass on higher commodity costs through price increases.

The passenger vehicle industry has sustained strong growth since the GST rate cuts last year. Lower borrowing costs have also improved affordability, while income tax reforms have left consumers with more disposable income.

In the first half of the current financial year, domestic passenger vehicle sales grew 28.3% to 20.55 lakh units.