“The Indian automobile industry enters the second half of 2025-2026 with renewed cheer, supported by strong festive season momentum, stable macroeconomic conditions, and GST 2.0 reforms that have improved overall affordability and consumer sentiment,” the industry body said
New Delhi: Passenger vehicle dispatches from companies to dealers rose 4 per cent year-on-year in September to 3,72,458 units, industry body SIAM said on Wednesday.
The overall passenger vehicle dispatches last month rose 4.4 per cent to 3,72,458 units, as against 3,56,752 units in September 2024.
Two-wheeler sales witnessed a 7 per cent on-year rise to 21,60,889 units last month, as compared to 20,25,993 units in the year-ago period, the Society of Indian Automobile Manufacturers (SIAM) said.
Total three-wheeler dispatches increased to 84,077 units last month, an increase of 5.5 per cent, as compared to 79,683 units in the same month the previous year.
“In spite of the new GST rates coming into effect from September 22, i.e. only for 9 days of the month, passenger vehicles, two-wheelers and three-wheelers have already posted their highest-ever sales of September,” SIAM President Shailesh Chandra told reporters here.
Looking ahead, the outlook for the sector remains encouraging due to key tailwinds, he added.
“The GST 2.0 reform is a landmark decision of the government, which, apart from catapulting the Indian auto industry to the next level, would bring in vibrancy in the entire economy, as this industry is closely intertwined with strong forward and backward linkages,” Chandra stated.
In the July-September quarter, passenger vehicle sales stood at 10,39,200 units, a drop of 1.5 per cent, as compared to 10,55,137 units in the same quarter of last fiscal.
Two-wheeler sales witnessed a growth of 7 per cent year-on-year to 55,62,077 units, as compared to the July-September quarter of the previous fiscal year.
Three-wheeler dispatches to dealers saw a growth of 10 per cent year-on-year to 2,29,239 units in September, SIAM said.
“The Indian automobile industry enters the second half of 2025-2026 with renewed cheer, supported by strong festive season momentum, stable macroeconomic conditions, and GST 2.0 reforms that have improved overall affordability and consumer sentiment,” the industry body said.
“While the industry remains watchful of geopolitical developments, the overall outlook for the rest of the current financial year remains encouraging, with the sector expected to close the fiscal year on a positive growth trajectory,” it added.
India’s automobile retail sector witnessed a remarkable turnaround in September 2025, driven by the twin impact of festive demand and the rollout of the landmark GST 2.0 reforms, the Federation of Automobile Dealers Associations (FADA) said.
According to FADA Vice President Sai Giridhar, the first three weeks of September were subdued as customers deferred purchases in anticipation of the new GST regime. However, sentiment reversed dramatically in the final week when Navratri festivities coincided with the implementation of lower GST rates, igniting a strong consumer response across segments.
“September 2025 was an exceptionally unique month for India’s automobile retail industry. The first three weeks were largely muted, but the dynamics changed in the final week as festive cheer and GST 2.0 reforms revived sentiment. As a result, the month ended with an overall 5.22% YoY growth,” Giridhar said.
Two-wheelers led the rebound with 6.5 per cent growth, followed by passenger vehicles at 5.8 per cent, tractors at 3.6 per cent, and commercial vehicles at 2.6 per cent. However, three-wheelers and construction equipment witnessed declines of 7.2 per cent and 19 per cent, respectively.
FADA noted that while the surge came late in the month, dealers used the window to replenish inventory, especially in the PV segment, where stock levels have now risen to around 60 days, indicating preparedness for the peak festive season in October.
Describing Navratri 2025 as a “Never Seen Before” moment, Giridhar said the festival turned into a true ‘Bachat Utsav’, unlocking record-breaking sales.
“Navratri 2025 will go down as one of the most memorable chapters in India’s automobile retail journey a true celebration of affordability and optimism unleashed by GST 2.0. Overall retails surged by 34% YoY, marking a historic high during any festive season,” he added.
Two-wheelers reported 36 per cent growth, passenger vehicles 34.8 per cent, commercial vehicles 14.8 per cent, three-wheelers 24.5 per cent, and tractors 18.7 per cent, while construction equipment declined by 18 per cent due to heavy rainfall slowing construction activities.
Giridhar credited the GST 2.0 reform for rejuvenating buyer sentiment and sparking record footfalls and deliveries nationwide. “It reminded us what the right policy at the right time can do for a nation’s sentiment,” he said.
Looking ahead, FADA expressed high optimism for October 2025, with Dhanteras and Deepawali expected to deliver all-time high sales.
“With GST 2.0 enhancing affordability, above-normal monsoon boosting rural income, and stable interest rates supporting financing, India stands at the cusp of its most spectacular 42-day festive season in history,” FADA said.
Meanwhile according to a report by Centrum Institutional Research, auto retail sales witnessed a robust recovery during the Navratri festival, with growth ranging between 15-35 per cent year-on-year (YoY) across passenger vehicle (PV) and two-wheeler (2W) segments, driven by strong festive sentiment,
The report expects Dhanteras and Deepawali to deliver peak festive sales for both PVs and 2Ws.
The report highlighted that retail demand in the PV segment across dealerships grew between 15-22 per cent YoY, led by major automakers including Maruti Suzuki India (MSIL), Tata Motors (TTMT), Honda Motor India (HMI), and Mahindra & Mahindra (M&M).
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It stated “overall tone from dealers suggests that retail growth during Navratri stood in the range of approx. 15-35 per cent YoY across PV and 2W. Dhanteras & Deepawali are expected to deliver peak festive sales”.
The 2W segment recorded higher growth of 25-35 per cent YoY across Honda, Hero, TVS, and Royal Enfield, although Bajaj sales remained muted during the period.
In the PV segment, the festive sentiment has resulted in a sharp 35-40 per cent surge in dealership footfalls. This boost was supported by recent price corrections, including GST rate cuts, and a notable increase in first-time buyers.
The strong retail conversion was also attributed to sustained traction from recent launches.
The report noted that demand remains skewed toward top-end variants, reflecting a clear premiumization trend across markets. However, momentum in electric PVs has moderated as aggressive pricing in internal combustion engine (ICE) models narrows the gap.
For two-wheelers, premium and 125cc+ offerings continued to outperform, with TVS and Royal Enfield leading the growth trajectory.
The first 20 days of September were impacted due to purchase deferrals amid GST-cut implementations, but momentum picked up in the latter half of the month and continued into early October.
Overall, the PV segment delivered a firm festive recovery, with sequential improvements in both footfalls and retail conversions, underscoring the strong revival in consumer demand during the Navratri period.