India’s Auto Sales Rise in September on GST Cuts and Festive Demand

India’s retail auto market witnessed strong growth in September, driven by revised GST rates and the festive season, the Federation of Automobile Dealers Associations (FADA) reported on Tuesday. Dealers recorded higher sales across both two-wheelers and passenger vehicles, reflecting renewed consumer demand.

Sales Growth Across Segments

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Overall, retail auto sales in September rose 5.2% year-on-year. Two-wheeler sales saw a 6.5% increase, while passenger vehicle sales climbed 5.8%. Although demand was subdued during the first three weeks of the month, sales surged after September 22, when the revised goods and services tax (GST) rates came into effect.

Dealers also reported record-breaking sales during the nine-day Navratri festival, posting a 34% year-on-year increase. A mix of new buyers entering showrooms and existing customers upgrading their vehicles contributed to the spike. Attractive festive schemes and the lower tax rates encouraged more purchases, the association said.

Factors Driving Demand

FADA highlighted several factors supporting the current growth trend. An above-normal monsoon and a strong harvest are expected to boost rural incomes, while stable lending rates are helping consumers access financing for vehicle purchases. The combination of these factors is likely to sustain demand in the coming months.

The association also forecasted “peak sales” during the Diwali festival in October, when high-value purchases, especially of passenger vehicles, are traditionally made by Indian consumers. Dealers anticipate that festive schemes, combined with continued GST benefits, will encourage further growth in the auto market.

Conclusion

Strong retail auto sales in September point to a promising future for India's auto sector as consumer interest is fuelled by tax cuts and festive demand.  The industry is anticipated to keep up its momentum in the near future due to favourable macroeconomic conditions and forthcoming festivals.