Auto Retail Sales Decline 23% in October Due to High Base Effect: FADA

Total vehicle retail sales in October dropped by 23 per cent year-on-year to 31,72,466 units, compared to 41,63,555 units recorded in October 2025, according to data released by the Federation of Automobile Dealers Associations (FADA) on Friday.

Both passenger vehicles (PVs) and two-wheelers (2Ws) registered double-digit year-on-year declines during the month, largely driven by an unfavorable high base from the previous year.

Explaining the shift, FADA President Sai Giridhar noted that last October was an exceptional month as it combined both Navratri and Deepawali, alongside pent-up demand following the GST 2.0 rate cuts of September 2025. In contrast, while Navratri fell in October this year, Dhanteras and Diwali shifted into November.

The sharpest declines were recorded in segments most dependent on Deepawali timing. Rural two-wheeler sales dropped by approximately 34 per cent, compared to a 20.77 per cent decline in urban markets. Geographically, Northern markets also saw steep reductions.

FADA characterized the drop as a case of demand being deferred rather than destroyed. Dealers expect the rural and two-wheeler buying that powered last October to reflect in the upcoming November sales figures.

Looking ahead, the near-term outlook for November remains cautiously optimistic as the festive season peaks with Dhanteras and Diwali bringing the year's primary retail wave into the month.

Segment-wise, passenger vehicle sales declined by 14.2 per cent year-on-year to 5,07,768 units in October, down from 5,92,032 units in October 2025. Two-wheeler sales saw a 28.3 per cent decrease to 23,21,419 units, compared to 32,39,949 units in the same month last year.

Conversely, three-wheeler sales experienced a 4 per cent year-on-year growth to reach 1,41,420 units, up from 1,36,025 units. Commercial vehicle sales grew by 2.2 per cent to 1,15,140 units compared to 1,12,561 units in October 2025. Tractor sales also posted a 3.1 per cent increase, rising to 79,285 units from 76,898 units year-on-year.

"The 23 per cent decline in October auto retail sales is a clear reflection of calendar shifts rather than a structural drop in consumer demand. When analyzing seasonal retail data, high-base effects from overlapping festivals in the previous year often skew monthly comparisons. The growth in commercial vehicles, tractors, and three-wheelers indicates underlying demand stability. For businesses operating in this ecosystem, looking at combined festive performance across October and November will provide a more accurate picture of market momentum." — Dr. Shishir Gupta, Founder & CEO, StartupLanes