India’s auto retail market continued to hold firm after the festive season, with two-wheelers and passenger vehicles posting strong year-on-year gains in the weeks following Diwali. Vahan data for the period from November 11-27 shows that two-wheeler registrations rose 38% and passenger vehicle registrations grew 31% compared with the post-festive period from November 22 to December 8 in 2024.
The sustained momentum comes after a record high in October, with overall retail sales surging 40.5% year-on-year to an all-time high of 40.2 lakh units. The surge was driven by a rare confluence of factors–GST 2.0 tax reforms, back-to-back festivals, and a resurgent rural economy–which together sparked the strongest wave of demand in India’s automotive history. Meanwhile, retail sales during the 42-day festive window grew 21% YoY, setting an all-time festive sales and growth record across segments.
The automotive industry had entered November on a high note, raising concerns about a possible post-festive moderation. Instead, demand has remained resilient. For April-November 2025, Vahan registrations show two-wheeler growth at 10% and passenger vehicle growth at 8% year-on-year. Analysts say the growth now required in the remaining four months of FY26 is minimal.
The Federation of Automobile Dealers Associations’ survey also suggests that the momentum will sustain into November, though with natural moderation after the record October. In November, 64% of dealers expect growth, while 70% foresee expansion through January 2026.Two-wheeler retailers cited rural liquidity and wedding-season demand, and PV dealers reported strong undelivered festive bookings.
“Strong rural cash flows post-harvest, marriage season demand, and improved stock availability across categories are expected to sustain retail momentum (in near term). Upcoming new model launches, healthier financing conditions, and stable fuel prices further reinforce a supportive ecosystem for continued growth,” FADA said.
According to Jay Kale, Executive Vice President, Equity Analyst (Auto & Auto Ancillaries) at Elara Capital (Elara Securities), the sector needs only 7% year-on-year growth in December-March for two-wheelers and 1% for passenger vehicles to meet Elara’s FY26 estimates of 9% growth for 2Ws and 5.5% for PVs. He added that the post-festive trend indicates steady underlying demand, even as inventories normalise across dealerships.