India's automotive sector roared to a historic high in October 2025, with domestic car sales reaching an unprecedented 4.70 lakh units. This marks a significant 17% year-on-year increase, fueled by the festive season and the positive impact of recent Goods and Services Tax (GST) reforms, often referred to as "GST 2.0." The record-breaking performance has injected strong optimism into the industry, with major automakers reporting their best-ever monthly sales figures.^[1][2][3] ### GST 2.0 Fuels Affordability and Demand The new GST 2.0 framework, which took effect on September 22, 2025, has played a crucial role in boosting car sales. This landmark reform simplified the tax structure for automobiles. It reduced the GST rate on small cars (petrol, LPG, or CNG vehicles with engines up to 1,200cc and length under 4,000mm, and diesel vehicles up to 1,500cc and 4,000mm in length) from the previous 28% plus cess to a lower 18%.^{[4][5][6][7][8]} Conversely, luxury cars and larger SUVs now face a flat 40% GST, simplifying their pricing structure.^[5][6][7] This reduction in tax for entry-level vehicles made them noticeably more affordable, attracting a new wave of buyers. Maruti Suzuki India Chairman R.C. Bhargava noted that the GST rate reduction "sparked the revival of small cars, proving wrong the perception that Indian consumers have moved up to aspirational and bigger segments."^[8] He added that the retail sales growth in the 18% GST category surged by 30%.^[8] ### Festive Season Drives Consumer Spending The auspicious festive period, encompassing Dussehra, Dhanteras, and Diwali, significantly contributed to the sales surge. Consumers often time their vehicle purchases during these holidays, taking advantage of special offers and the positive sentiment. Automakers reported robust bookings and deliveries throughout this period.^{[1][9][4][10][11][12][13][14][15][16]} Hyundai Motor India's Whole-time Director & Chief Operating Officer, Tarun Garg, stated, "October 2025 was a month driven by the festivals of Dussehra, Dhanteras and Diwali, further complimented by the positive impact of GST 2.0 reforms. This provided a significant boost to the Indian automotive industry."^[11][3][14] Maruti Suzuki, for instance, received an impressive 5 lakh bookings during the 40-day festival period, with retail sales nearly doubling compared to last year.^[3] ### Automakers Report Stellar Performances Leading the charge, Maruti Suzuki India recorded its highest-ever monthly sales, dispatching 220,894 units in October. Domestic sales alone reached an all-time high of 180,675 units.^{[1][9][10][17][13][14]} The company's compact cars like the Swift, WagonR, and Baleno saw strong momentum, with sales reaching 76,143 units.^[9] Tata Motors also achieved record monthly sales for the second consecutive month, selling 61,295 passenger vehicles, including electric vehicles (EVs). This marked a 27% year-on-year growth.^{[9][4][10][14]} The company delivered over 1 lakh vehicles between Navratri and Diwali, a 33% increase from the previous year.^[4][2] SUVs were a major growth driver for Tata Motors, accounting for a record 77% of its monthly sales.^[2][14] Its EV wholesales also hit an all-time high of 9,286 units, surging 73% year-on-year.^[10][3][14] Mahindra & Mahindra saw a robust 31% year-on-year growth in passenger vehicle sales, with domestic sales totaling 71,624 units. The company reported its highest-ever SUV sales during the month.^{[4][2][11][13]} Nalinikanth Gollagunta, CEO, Automotive Division at M&M Ltd, highlighted this achievement, stating, "In October, we achieved SUV sales of 71,624 units, a growth of 31%, which is the highest SUV sales we have clocked ever in a month."^[11][3] Kia India also reported its best-ever monthly sales, reaching 29,556 units, a 30% increase compared to October last year.^{[9][4][10][13]} Toyota Kirloskar Motor experienced a significant 39% rise in total sales, with 42,892 units sold.^[4][10][13] Skoda Auto India celebrated its best month ever, selling 8,252 units.^[9][4][11] While most automakers reported strong gains, Hyundai Motor India saw a slight dip of 3.1% in domestic sales, totaling 53,792 units.^[2][10][11] However, its popular SUV models, Creta and Venue, achieved their second-highest combined monthly sales, with 30,119 units sold.^[11][3][14] ### Positive Outlook for the Automotive Sector The strong performance in October 2025 indicates a significant recovery and positive momentum for the Indian automotive industry. The combination of government policy support through GST reforms and buoyant consumer sentiment during the festive season created an ideal environment for growth. Industry experts believe this trend could continue, especially in the compact car segment benefiting from the reduced GST rates.^{[3][18][15][8]} Varinder Wadhwa, Vice President, Sales-Service-Used Car Business at Toyota Kirloskar Motor, commented, "The favourable economic environment during the festive season, reinforced by the GST reforms, boosted market confidence."^[2][11] The increased affordability of smaller vehicles is attracting new buyers, including those upgrading from two-wheelers, which is expanding the overall market base.^[15] This record-setting month sets a promising tone for the automotive sector as it heads into the final quarter of the year.