Anticipating robust sales in the festive season, Passenger vehicle (PV) dealers are holding around 43-45 days of inventory, more than double the 21 days recommended by the Federation of Automobile Dealers Associations (FADA).
“On the channel side, PV inventory rose by a further 5 days over August-end to around 43–45 days — well above FADA’s recommended 21-day benchmark, with 60% of PV dealers reporting higher stock due to upcoming festivals,” said FADA in a statement on Tuesday.
The hoarding of cars comes even as PV retail sales last month clocked its best-ever September at 4,27,213 units, up 32.10% year-on-year and 6.17% month-on-month, with Urban and Rural growing almost in lockstep (+32.11% and +32.09% YoY).
FADA President Sai Giridhar highlighted price hikes by carmakers as a tailwind for future demand. Persistent inflation and higher commodity costs, compounded by disruptions to global trade and energy markets from the US-Iran war, are prompting most carmakers in India to go for multiple price hikes.
“One year on from GST 2.0, affordability remains the single engine of this cycle — and dealers now flag further price increases eroding that very affordability as their foremost risk for the quarter ahead. Protecting the GST gain is, to our mind, the key to converting the festive season into durable growth,” said Giridhar.
Meanwhile, total retail vehicle sales in September 2026 were the best-ever September in Indian Auto Retail, with the industry registering 25,36,920 units, up 31.82% YoY and 4.69% MoM.
Giridhar said that this headline should be read with discipline as the 31.82% annual growth is the most base-distorted print of the year — a mirror of last September, when buyers deferred purchases in the week before GST 2.0 took effect on 22 September 2025.
“The cleaner signals are three. It was the best-ever September across five of our six categories and, with it, the best-ever first half of any financial year at 1,55,12,319 units (+20.77%); retail rose 4.69% over August; and even setting the distorted September aside, FY’27’s first five months grew about 17%, which is the truer underlying run-rate,” added Giridhar.
Dealers expect October to deliver the festive pick-up that September deferred: with Navratri (11–20 October) and Dussehra, demand held back during Pitru Paksha should convert into a concentrated burst of deliveries from mid-month, even if the first ten days stay quiet.
“Booking pipelines are already building for 63% of dealers. Importantly, with the GST 2.0 anniversary now behind us, October will be the first month to offer a clean, like-for-like year-on-year comparison,” said FADA.