India’s auto retail market has remained resilient post-festive season, with two-wheelers and passenger vehicles showing impressive year-on-year growth following Diwali. According to Vahan data for the period from November 11-27, two-wheeler registrations surged by 38%, while passenger vehicle registrations saw a 31% increase, compared to the same post-festive period in 2024 (November 22 to December 8).
“The strong momentum follows a record-breaking October, where overall retail sales surged 40.5% year-on-year, reaching an all-time high of 40.2 lakh units. This spike was fueled by a unique combination of factors GST 2.0 tax reforms, consecutive festivals, and a revitalized rural economy which together triggered the highest demand wave in India’s automotive history. During the 42-day festive period, retail sales grew by 21% YoY, setting new records for both festive sales and growth across all segments.
The automotive industry entered November on a strong note, raising concerns about a potential post-festive slowdown. However, demand has remained robust. For the period of April-November 2025, Vahan registrations show a 10% growth in two-wheelers and an 8% increase in passenger vehicles compared to the previous year. Analysts suggest that only modest growth is needed in the remaining four months of FY26 to meet annual targets.
The Federation of Automobile Dealers Associations’ survey indicates that the momentum will continue into November, though with a natural moderation following the record-breaking October. In November, 64% of dealers expect growth, while 70% anticipate further expansion through January 2026. Two-wheeler retailers attributed the demand to strong rural liquidity and wedding-season sales, while passenger vehicle dealers reported a solid backlog of undelivered festive bookings.
FADA noted that strong rural cash flows post-harvest, demand from the marriage season, and improved stock availability across categories are expected to sustain retail momentum in the near term. Additionally, upcoming new model launches, favorable financing conditions, and stable fuel prices are expected to further strengthen the ecosystem, supporting continued growth.
Jay Kale, Executive Vice President and Equity Analyst (Auto & Auto Ancillaries) at Elara Capital, stated that the sector needs just 7% year-on-year growth in December-March for two-wheelers and 1% for passenger vehicles to meet Elara’s FY26 growth estimates of 9% for 2Ws and 5.5% for PVs. He noted that the post-festive trend reflects steady underlying demand, even as inventories normalize across dealerships.
