GST cuts, Navratri drive 5.8% surge in passenger vehicle sales: Fada

Retail sales of passenger vehicles (PVs) increased 5.8 per cent year-on-year (Y-o-Y) in September as tax cuts boosted demand during Navaratri festivities, the Federation of Automobile Dealers Associations (Fada) said on Tuesday. 

Sales were muted in the first three weeks of September but surged after September 22, when the revised goods and services tax (GST) rates took effect, the association said. As many as 299,369 units were sold last month. 

Overall, automobile retail sales increased 5.2 per cent compared to September 2024. Sales of two-wheelers, tractors, and commercial vehicles grew 6.5 per cent, 3.6 per cent, and 2.6 per cent, respectively. The three-wheeler and construction equipment segments declined 7.2 per cent and 19 per cent. 

 

"For the first time, dealerships across the nation witnessed record-breaking footfalls and deliveries during Navaratri, with overall retail surging by 34 per cent Y-o-Y — a historic high during any festival season," said Sai Giridhar, vice-president, Fada. Around 1.15 million vehicles were sold during the nine days of Navaratri (September 22 to October 2), compared to 863,000 festivities last year. 

“The first three weeks (of September) were largely muted, with customers holding back in anticipation of the GST 2.0 reforms.  However, the dynamics changed dramatically in the final week as Navaratri festivities coincided with the implementation of lower GST rates, reviving customer sentiment and accelerating deliveries across most vehicle categories,” Giridhar said. 

Among passenger vehicle companies, Maruti Suzuki said its sales increased 7 per cent to 123,242 units, Tata Motors’ sales increased 26 per cent to 41,151 units, and Mahindra & Mahindra’s 5 per cent to 37,659 units. Hyundai Motor India’s sales dropped 8 per cent to 35,812 units. Tax cuts and festival demand led to renewed enquiries and bookings, although limited billing days restricted the full potential of the rebound. Dealers used this period to replenish inventory. Passenger vehicle stocks increased to around 60 days, reflecting preparedness ahead of Diwali in October. 

As many as 1.29 million two-wheelers were sold in September, up 6.51 per cent from the same month last year. Market leader Hero MotoCorp’s sales increased 19 per cent to 323,268 units. While Honda Motorcycle and Scooter India’s sales dropped more than 3 per cent to 323,614 units, TVS Motor’s increased more than 10 per cent to 2,46,064 units. 

Fada said the 42-day festival season and GST reforms are “transforming affordability and confidence across every income segment” and the trend may lead to an “unprecedented growth phase”. Above-normal monsoon rains, a strong kharif harvest, and stable policy rates have boosted rural and urban purchasing power. 

“This unique alignment of favourable economic, climatic, and policy factors is set to propel sentiment to record levels, turning this Dhanteras and Deepawali into a celebration not just of light, but of renewed mobility aspirations across India," Giridhar added.