India's Passenger Car Sales Grow 11% Year-on-Year in October

According to foreign media reports, the Indian automotive industry achieved its best-ever monthly performance in October, highlighting a significant rebound in domestic consumption in India, which may offset the impact of a slowdown in exports to the United States.

According to data from the Federation of Automobile Dealers Associations (FADA India), driven by increased rural demand, goods and services tax (GST) reductions, and a surge in festive consumption, India's total automotive retail sales, including cars and tractors, grew by 40.5% year-on-year in October. Among them, passenger car sales increased by 11% to 557,000 units, while scooter and motorcycle sales surged by 52% to 3.15 million units.

Image Source: Maruti Suzuki

From the market landscape, the joint venture between Japan's Suzuki Motor and South Korea's Hyundai Motor dominates in India, followed closely by leading local manufacturers such as Tata Motors and Mahindra.

C.S. Vigneshwar, President of FADA India, stated in a statement: "In October, sales of passenger cars and two-wheelers in India reached historic highs, which not only reflects the return of consumer confidence but also demonstrates the strong resilience and vitality of the Indian economy."

According to government data, the Indian automotive industry contributes 7.1% to the country's Gross Domestic Product (GDP), accounting for nearly half of the manufacturing GDP. As the world's fourth-largest automobile producer, India's exports to the United States constitute 2% of its GDP.

In the fiscal year 2025, private and household spending in India accounted for over 60% of GDP, a level comparable to that of developed economies such as the United States and the United Kingdom, reducing the country's reliance on exports. Analysts believe that the rebound in domestic demand in India is expected to offset the negative impact of the high tariffs imposed by the United States on Indian goods since August.

In September, the Indian government announced a wide-ranging reduction in the Goods and Services Tax to stimulate demand, including lowering the tax rate on small cars and two-wheelers from 28% to 18%, which significantly boosted market demand.

According to data from the Federation of Automobile Dealers Associations of India, rural demand in the country is particularly strong: the growth rate of passenger car sales in small towns is more than three times that of urban centers, and the growth rate of two-wheeler sales is almost twice that of cities.

The association also pointed out that feedback from car dealers indicated an increase in customer traffic to stores and an improved market sentiment, which contributed to a very high transaction conversion rate.

The association stated that dealers of two-wheelers and cars (especially those in rural areas of India) expect market demand to remain strong for the next three months.