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Informist, Tuesday, Nov. 4, 2025

 

By Anand JC

 

MUMBAI – Indian automakers reported a record high in wholesale passenger vehicle sales in October, buoyed by the festival season, price reductions following the cut in the goods and services tax, and additional discounts offered by companies. Despatches of passenger vehicles grew by double digits in October for the second consecutive month.

 

India's top four carmakers – Maruti Suzuki India Ltd., Tata Motors Passenger Vehicles Ltd., Mahindra & Mahindra Ltd., and Hyundai Motor India Ltd. - together despatched 363,029 passenger vehicles in October, up 12% on year and 13% on month. 

 

The automobile companies acknowledged that this double-digit growth will likely be temporary, driven by pent-up demand. The automobile industry is expected to grow 6% in the second half of 2025-26 (Apr-Mar), Maruti Suzuki's Chairman R.C. Bhargava told reporters last week.

 

October also saw the resurgence of small cars, which now attract a GST of 18%, down from 28%, and the additional compensation cess of 1-2?fore Sept. 22. Bhargava expects small car sales to grow 10% in the second half of FY26, faster than the overall industry.

 

Wholesale and retail car sales in October reflected both deferred purchases and advance sales ahead of the wedding season, driven by higher discounts offered as part of a limited-time promotion.

 

"We believe demand trends will be clear from Jan-26 (January 2026) once pent-up demand settles down," Nomura Equity Research said in a note Tuesday. "While we expect demand to remain strong for the next three months, we have been anticipating supply challenges in October due to lower production days and logistics issues, which OEMs have managed much better," Nomura said.

 

Three of the four carmakers reported record-high despatches last month, with Hyundai Motor being an outlier. While the other three companies reported a robust year-on-year growth in domestic car wholesale sales, the Creta-maker was the only firm to report a contraction in local sales. In contrast, Hyundai Motor's exports grew by double digits, while those of Maruti Suzuki and Tata Motors fell year-on-year.

 

Cars became cheaper from the last week of September after the government cut GST rates, and automobile companies gave discounts during the festive month of October. Automakers offered blended discounts of around 2-3% in October, in addition to dealer discounts.

 

M&M "set the bar high" in October, ICICI Securities said, as the company's sport utility vehicle despatches of 71,624 units grew 31% on year – the strongest growth rate in the last 17 months. M&M's passenger vehicle line-up consists solely of utility vehicles. These bigger cars currently attract a GST of 40%, down from 28% and an additional compensation cess of 14-22?fore the GST rates were cut. The company's sales also got a boost from updated editions of the Thar, Bolero, and Bolero Neo.

 

Tata Motors sold 61,295 passenger vehicles to dealers in October, up 27% year on year. The company's car sales grew year-on-year for the second consecutive quarter last month, having contracted for five straight months between April and August.

 

India's biggest passenger vehicle maker, Maruti Suzuki, which is also the country's top small car seller, benefited the most from the GST cut. Retail sales of Maruti Suzuki in October grew 20% on year. Of this, sales of smaller cars grew 30% on year, while those of bigger cars grew by a modest 4-5%, the company had said.

 

Compact cars such as the Baleno and Swift accounted for 43% of the company's domestic passenger vehicle despatches in October. Sales of this sub-segment grew 15% year on year, the strongest on-year growth since December. However, mini cars such as the Alto and S-Presso continued to disappoint, with sales falling for the 10th consecutive month, down 15% year on year.
 

"Demand for cars will remain positive going forward," a Mumbai-based analyst tracking the sector said. "However, small car sales won't see a resurgence. People will continue to prefer compact SUVs (sport utility vehicles) or bigger vehicles," the analyst said.  End

 

Edited by Saji George Titus

 

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