Auto Retail Accelerates: GST Cuts and Festive Season Drive Massive September Surge

Auto Retail Accelerates: GST Cuts and Festive Season Drive Massive September Surge

The Federation of Automobile Dealers Associations (FADA) reported an exceptional surge in India’s vehicle retail sales for September 2025, driven by the implementation of GST 2.0 reforms and the onset of the festive season.

Retail Growth Boosted by GST Optimism

• Overall Market Surge: After a muted first three weeks due to anticipation, the final week saw a dramatic acceleration in deliveries, resulting in an overall 5.22% Year-on-Year (YoY) growth for the month.
• Two-Wheeler (2W) Revival: The largest segment, two-wheelers, saw robust growth of 36% YoY, fueled by improved affordability due to the lower GST rates, festive offers, and pent-up demand finally translating into sales.
• Passenger Vehicle (PV) Momentum: Passenger Vehicles clocked a strong 34.8% growth. This was driven by a wave of new customers and existing owners upgrading to higher variants, taking direct advantage of the announced GST reductions and seasonal schemes.
• Commercial and Farm Vehicles: Commercial Vehicles (CVs) rose by 14.8%, reflecting renewed infrastructure optimism. Tractor sales also grew impressively by 18.7%, despite uneven monsoons.

Near-Term Outlook

The FADA report concluded that the near-term outlook for October 2025 remains highly optimistic, powered by economic resilience, continued festive euphoria (including Navratri), and the “transformational impact” of GST 2.0.