India's auto sales just had a blowout month, surging 40% on the back of strong domestic demand

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India’s auto industry posted its strongest month on record in October, underscoring a sharp rebound in domestic consumption that could offset the impact of the slowdown in exports to the U.S.

Total retail sales across all vehicle segments — from cars to tractors — were up 40.5% from a year earlier, data from the Federation of Automobile Dealers Associations showed.

“Both passenger vehicles and two-wheelers achieved lifetime highs, signaling renewed consumer confidence and strong economic undercurrents,” said C.S. Vigneshwar, President of the trade body, in the release.

India’s automotive industry contributes 7.1% to the nation’s gross domestic product and nearly half of manufacturing GDP, according to government data. The country is the fourth-largest automobile producer globally. Exports to the U.S. account for 2% of India’s GDP.