Driven by GST 2.0 changes and holiday season demand, India's car industry reached record sales in October 2025. As part of the "Viksit Bharat by 2047" plan, the government's lowering of GST on sub-4-meter vehicles from 28% to 18% greatly increased affordability for entry-level vehicles, therefore improving customer mood. With passenger vehicle sales exceeding 5.57 lakh units for the first time, overall car sales increased by 40.5% year over year to a record 40.24 lakh units. Combining pent-up demand with holiday spending to establish all-time highs, sales bounced back strongly following a subdued September transition period.
Driven by robust rural demand, holiday buying, and better affordability from tax cuts on entry-level models, two-wheelers spearheaded the growth with a 51.8% rise to 31.5 lakh units. Encouraged by harvest-related cash influx and increased farm income, rural markets outperformed metropolitan areas in expansion. With Tata surpassing 10,000 electric car sales, Mahindra & Mahindra, Toyota, and Maruti Suzuki reported their best-ever monthly results, while electric vehicles also saw strong expansion. With an overall increase of 21% over 2024, October's 42-day festival season provided more impetus.
As commercial vehicle sales climbed 17.7%, tractors by 14.2%, and three-wheelers by 5.4%, the market momentum went past passenger and two-wheelers. Dealer inventories grew in reaction to robust demand, with favorable attitude expecting additional increases in November owing to the wedding season and forthcoming launches. The GST reforms and holiday demand were cited by the Federation of Automobile Dealers Associations (FADA) as the major impetus behind India's car boom, hence confirming the country's position as one of the fastest-growing automotive markets globally.