Why 32% growth does not always mean 32% more demand: the base effect, explained simply
27 October 2026 · 2 min read · HireHo
Based on FADA's September 2026 retail report, as reported by Motor India. Summarised in our own words.
In September 2026 dealers sold 25,36,920 vehicles of all kinds, 31.82% more than September 2025. FADA's president Sai Giridhar called this 'the most base-distorted print of the year'. That is a technical way of saying: last year's number was unusually low, so this year's growth looks unusually high.
A simple example
Say a shop sells 100 shirts in a normal month. In one month customers wait for a sale and the shop sells only 70. Next month the shop sells 100 again. That is a 43% rise over the low month, but nothing improved. The low month is the 'base'.
What happened here
In September 2025, many buyers delayed purchases while waiting for GST 2.0 to reduce taxes on vehicles. FADA says that deferment made September 2025 a weak base. So the growth in September 2026 includes a catch-up effect.
What is the real trend?
FADA says underlying growth over the first five months of FY2026-27 was about 17%. From April to September 2026, total retail was 1,55,12,319 vehicles, up 20.77%. FADA also says October is the first clean comparison since GST 2.0, so October's growth will be a better test of true demand.
When you see a very large percentage, ask: what was the number a year ago, and was that year normal?