The passenger vehicle (PV) industry posted its strongest festive season in recent years, with retail sales rising 15% year-on-year in October, according to Icra. The agency expects wholesale volumes for the entire FY26 to grow 1-4%, supported by goods and services tax (GST) cuts, new  launches by carmakers, and healthy demand during the wedding season.
GST cuts deferred demand fuel 86% October sales jump
The robust growth in October — an 86% sequential jump in sales — was largely driven by GST reductions and a deferral of retail activity after the announcement of GST rate rationalisation. Wholesale volumes, reflecting dispatches from manufacturers to dealers, surged 17% year-on-year and 24% month-on-month to 460,000 units in October, as carmakers built up inventory ahead of the festive season.Â
For the first seven months of FY26, overall wholesale growth was modest at 1.5%, while retail volumes rose 4%. Strong retail offtake contributed to a decline in dealer inventory levels. Data from the Federation of Automobile Dealers Associations (Fada) showed stocks fell to 53-55 days by the end of October from 60 days in September.Â
Festive sales hit 8 lakhs units, up 21%
During the 42-day festive period, the industry sold 800,000 units, a 21% increase over the previous year. Utility vehicles continued to dominate, accounting for 66-67% of total industry volumes. Meanwhile, compact and super-compact car segments showed signs of revival following GST reductions, which improved affordability.
Exports also recorded a healthy 12% year-on-year growth in October, albeit from a relatively low base. Maruti Suzuki remained the top exporter, followed by Hyundai Motor India. For April-October, export volumes expanded 17%, reflecting sustained supply efforts by Indian carmakers in overseas markets.
