Auto dealers gear up for robust Oct as festival season bookings rise

Auto dealers expect deferred purchases to convert into festive deliveries from mid-October, while higher PV inventory and EV supply constraints remain key monitorables

Automobile dealers are seeing healthy bookings ahead of Navratri and Dussehra, and expect demand deferred during Shradh to translate into a pickup in deliveries from mid-October, even though a high base from last year's goods and services tax (GST)-led surge makes year-on-year (Y-o-Y) comparisons less meaningful.

 

Dealer confidence has strengthened, with 75.57 per cent of dealers surveyed by the Federation of Automobile Dealers Associations (Fada) expecting growth in October, against 67.09 per cent ahead of September. About 63 per cent of dealers report building booking pipelines.

 

“Bookings, in fact, are higher, are healthy,” Fada President Sai Giridhar told Business Standard.

 

September produced record retail volumes, with overall registrations rising 31.82 per cent Y-o-Y and 4.69 per cent sequentially to 2.54 million units. Passenger vehicle (PV) retail touched a record 427,213 units, up 32.1 per cent Y-o-Y and 6.17 per cent from August, while two-wheeler sales rose 33.08 per cent to 1.79 million units.

  

Fada, however, cautioned that the Y-o-Y growth is distorted by a weak September 2025 base, when customers postponed purchases ahead of GST 2.0 rate changes effective September 22. Excluding September, retail grew around 17 per cent in the first five months of financial year 2026-27 (FY27). First-half retail reached a record 15.51 million units, up 20.77 per cent.

 

October will be the key festive test. With Shradh extending into the first part of the month and Navratri running from October 11-20, Fada expects deferred demand to convert from mid-month. 

 

Last year, retail and wholesale activity had paused ahead of the GST reduction, followed by a sharp release of pent-up demand. October 2025, therefore, presents a demanding base. “This year... especially passenger vehicle dealers are more prepared,” Giridhar said.

 

PV inventory rose to 43-45 days in September from 38-40 days in August as dealers stocked up for festivals. Giridhar said 45 days was healthy ahead of the festive peak, when dealerships can clock 1.5-2 times normal monthly retail. Fada expects inventory to start declining by end-October towards 27-30 days, with dispatches ideally staying below retail during the month.

 

Electric vehicles (EVs), meanwhile, face a demand-supply mismatch, particularly in PVs. Total EV retail hit an all-time high of about 334,000 units in September, taking penetration close to 13 per cent, while PV EV penetration touched a record 8.45 per cent.

 

Giridhar said imported components, particularly batteries, and shipping constraints were affecting availability, with some original equipment manufacturers (OEMs) reporting freight costs rising two-three times. Festive buyers unwilling to wait for EV deliveries could switch to petrol or CNG, he said.

 

Dealer optimism extends beyond October: 78.28 per cent expect growth during October-December and 49.5 per cent have upgraded their FY27 outlook. Fada nevertheless remains “cautiously optimistic”, with festive conversion, inventory discipline, and affordability being key variables. Festive schemes are also higher than last year as subsequent price increases have eroded part of the GST benefit.