Post-GST, India wants bigger cars: 79% buyers upgrade, EV curiosity soars

53% can now make higher down payments, signalling stronger consumer confidence

India’s car buyers are not just buying more, they’re buying up. A new SmyttenPulse AI study founf that post-GST rate reductions have triggered a powerful “upgrade wave”, as more Indians stretch their budgets to buy bigger, better cars.

 

The survey, conducted in October 2025 across Tier-1, 2 and 3 cities, revealed that 79% of buyers are reinvesting their GST savings into higher-end models or premium add-ons rather than saving the difference. SUVs continue to rule Indian roads, and electric vehicles (EVs) are fast gaining traction — even as concerns over battery life and charging remain.

 

The ‘Upgrade Wave’: Aspiration, Not Just Affordability

 

According to the report titled Post-GST Car Buying Behaviour Trends, 46% of respondents said they had already upgraded to a larger vehicle category, moving from hatchbacks to compact or full-size SUVs.

 

“GST cuts have done more than make cars affordable — they’ve reignited aspiration,” said Swagat Sarangi, co-founder of SmyttenPulse AI. “Middle-class buyers are stretching upward — from base variants to top trims, from budget brands to feature-rich models.” 

Over 60% plan to upgrade to higher variants within the same brand

 

In fact, over 60% of buyers plan to upgrade within the same brand family, choosing higher variants or models. SUVs and compact SUVs top the charts, followed by sedans and hatchbacks. 

Impact of Post-GST initiatives on car buying preferences

SUVs and compact SUVs remain the preferred and most in-demand car categories among consumers, followed by Sedans and lastly, hatchbacks.

 

EV Interest Rising — Despite Range Anxiety

 

Electric vehicles are making steady inroads into buyer intent. 46% of respondents said they are “somewhat likely” to consider an EV for their next purchase, while another 29% said they are “quite likely” to do so. 

 

The top motivators include:

 

Environmental benefits (68%)

 

Government incentives (66%)

 

Reasonable pricing (55%)

 

However, challenges persist. Battery replacement cost (75%) and charging infrastructure (55%) remain the biggest concerns, followed by low resale value (52%) and limited service networks (48%).

 

“The data shows optimism, but also realism,” added Sarangi. “EV interest is strong, yet purchase decisions still hinge on ecosystem maturity and total cost of ownership.”

 

Consumer Confidence and Financing Rebound

 

The survey found that 53% of buyers can now make higher down payments than last year — a clear indicator of growing financial confidence.

 

Meanwhile, 58% prefer loans or EMIs, and 30% are opting for longer tenures, suggesting consumers are stretching comfortably, not cautiously.

 

Dealers and financiers say GST savings and festive financing schemes have boosted conversion rates. “Many consumers are treating the GST cut as an opportunity to move up the value ladder rather than delay purchase decisions,” said a Mumbai-based dealer association executive.

 

Around 55% of respondents felt “somewhat to very positive” about the GST changes, and 52% believed the reforms were designed with consumer benefit in mind.

 

This perception, SmyttenPulse noted, is fueling optimism in India’s auto ecosystem — where fiscal relief, EV incentives, and visible policy support are aligning to boost middle-class confidence.  The SmyttenPulse AI survey covered car buyers across 40+ cities, assessing the impact of GST revisions on purchase intent, financial readiness, and EV adoption. The platform uses AI-led behavioural analysis to decode real-time consumer trends across sectors including auto, FMCG, and retail.