FADA claims GST 2.0 sparks up vehicle sales, projects positive outlook for 2025 festival season

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The GST 2.0 episode announced by the Indian government has driven up the vehicle sales in September 2025, said Federation of Automobile Dealers Association (FADA).

Reflecting on September 2025 Auto Retail performance, FADA Vice President Sai Giridhar said: “September 2025 was an exceptionally unique month for India’s automobile retail industry. The first three weeks were largely muted, with customers holding back in anticipation of the GST 2.0 reforms. However, the dynamics changed dramatically in the fourth week as Navratri festivities coincided with the implementation of lower GST rates, reviving customer sentiment and accelerating deliveries across most vehicle categories. As a result, the month registered  an overall 5.22% YoY growth, with all segments— except three-wheelers and construction equipment—showing positive momentum.”

Category-wise, 2W, PV, Trac and CV posted YoY growth of 6.5%, 5.8%, 3.6% and 2.6%, respectively, while 3W and CE recorded a decline of 7.2% and 19%.

Across segments, a similar pattern recorded. R retails remained subdued till 21st September, followed by a surge once GST 2.0 came into effect. The reduction in GST rates, coupled with festive 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. Stock levels for PV segment hence rose to around 60 days, reflecting festive preparedness ahead of October’s peak season. The momentum built in the closing days of September will carry forward into Deepawali, marking a promising end to the 42-days festive period.”

Navratri 2025

Navratri 2025 Auto Retail Reflecting on September 2025 Auto Retail performance, Sai Giridhar said: “Navratri 2025 will be noted  as one of the most memorable chapters in India’s automobile retail journey — a true ‘Bachat Utsav’ unleashed by the visionary GST 2.0 reform announced by the Prime Minister.”

For the first time ever, dealerships across the nation witnessed record-breaking footfalls and deliveries, with overall retails surging by 34% YoY — a historic high during any festive season.

Every major segment contributed to this unprecedented momentum. 2W grew by 36%, powered by affordability improvements, festive offers, and pent-up demand finally translating into retail joy. PV clocked a robust 34.8% growth, as a wave of new customers entered showrooms and existing ones upgraded to higher variants, taking advantage of lower GST and irresistible festive schemes. CV rose by 14.8%, reflecting renewed confidence among operators as financing resumed and infrastructure optimism returned. 3W expanded by 24.5%, driven by strong urban mobility demand, while Tractors recorded an impressive 18.7% growth, despite uneven monsoons. Only Construction Equipment saw a decline of 18%, owing to heavy rains that slowed construction activity.

Near-Term Outlook

India stands at the cusp of what promises to be its most spectacular 42-day festive season in history. With GST 2.0 rate cuts transforming affordability and confidence across every income segment, the nation’s auto retail sector has entered an unprecedented growth phase. The combination of above-normal monsoon rains, a strong kharif harvest, and stable policy rates has boosted both 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.

The festive spirit is already evident — Dhanteras and Deepawali are expected to deliver all-time high sales, with auto dealerships witnessing surging enquiries and bookings across two-wheelers, passenger vehicles, and commercial fleets. Affordable prices post-GST 2.0, coupled with aggressive OEM offers and easy finance availability, have drawn a new wave of first-time buyers into showrooms, even as upgraders opt for premium variants. If the logistics and transport ecosystem performs seamlessly, this could well be the best festive retail season India has ever experienced, with supply chains matching the nation’s celebratory demand.

Overall, the near-term outlook for October 2025 remains highly optimistic, powered by economic resilience, festive euphoria, and the transformational impact of GST 2.0 — heralding a golden phase for Indian auto retail.

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