New Delhi, Nov 25 The Indian automobile industry witnessed a strong, demand-driven resurgence in October, with the commercial vehicle (CV) and two-wheeler segments posting robust growth in retail sales driven by the implementation of GST 2.0 reforms, which reduced tax rates, alongside strong festive sentiment and improved rural offtake, a report said on Tuesday.
The CV sector demonstrated strong underlying demand, with retail volumes reporting a robust 17.7 per cent year-on-year (YoY) growth and a significant 49.5 per cent sequential growth in October 2025. Light Commercial Vehicles (LCVs) were the standout performers, with retail volumes growing 29.8 per cent year-on-year and 64.3 per cent sequentially.
"This was driven by logistics demand from rural areas, GST reforms, and strong festive buying," ICRA said in its report.
Medium and Heavy Commercial Vehicles (M&HCVs) saw a slight decline of 1.4 per cent YoY in retail sales, influenced by fleet operators postponing purchases ahead of BS-VII norms.
However, a 26 per cent sequential growth indicates a release of pent-up demand post-GST announcement.
Meanwhile, reflecting the positive retail environment, domestic CV wholesale volumes witnessed a healthy 11.4 per cent YoY growth in October 2025, with a 7.8 per cent sequential growth.
For the first seven months of FY2026, wholesale volumes grew by 4.5 per cent YoY, mainly driven by increased freight movement and infrastructure development regaining momentum.
As per the report, the Indian CV industry is expected to register a modest YoY growth of 3-5 per cent in wholesale volumes in FY2026, aided by the resumption of construction and infrastructure activities and a steady economic environment.
At the same time, the domestic two-wheeler market experienced a historic month, with retail sales surging 51.8 per cent YoY to a record high in October 2025, said another ICRA report.
The electric two-wheeler segment continued its steady growth, with retail volumes reaching 1,44,365 units, a 4 per cent increase on a YoY basis. Their penetration in the overall segment remained stable at 6-7 per cent.
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