India's Auto Industry Gears Up for 2026 With Record Sales

India's automobile sector is set for a strong 2026 after record sales during the festive season, driven by GST 2.0 reforms, rural demand, and growing dealer confidence. October 2025 saw a 40.5% sales surge year-on-year, reinforcing optimism for continued growth aided by supportive policies and rural revival.

India's automobile industry is poised to enter 2026 on a high note, following remarkable sales figures during the 2025 festive season, bolstered by GST 2.0 reforms, increased rural consumption, and a positive dealer outlook.

The Federation of Automobile Dealers Associations (FADA) reported a 40.5% increase in auto retail sales year-on-year for October 2025, marking an industry high. The 42-day festive period from Dussehra to Diwali witnessed record numbers with a 21% year-on-year rise, the most robust festive cycle in India's automotive history.

This growth spanned across different segments, with two-wheeler sales soaring by 52% to 31.5 lakh units, and passenger vehicle sales climbing 11% to 5.57 lakh units. FADA President C.S. Vigneshwar highlighted the success of GST 2.0 as a pivotal factor for this surge, contributing to broad-based recovery and robust demand across urban and rural markets alike.

Looking ahead, FADA anticipates the festive momentum to extend into the remainder of 2025, powered by harvest incomes, wedding season purchases, and sustained policy support. Dealers remain optimistic, with 64% expecting growth in November and 70% projecting expansion through January 2026.

The association views the current environment as a blend of reform, resilience, and rural resurgence, with the GST 2.0 scheme making ownership more accessible and fueling middle-class consumption, especially in the small-car and two-wheeler markets. Entering 2026, the sector projects stable and inclusive growth, reflecting a firm national economic footing.

(With inputs from agencies.)