Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM) and Managing Director of Tata Motors Passenger Vehicles, expects the strong demand for passenger vehicles (PVs) to continue even after the festive season. He noted that while current sales momentum is being driven by pent-up demand and festive sentiment, the real ‘GST 2.0 customers’ are yet to enter the market.
“I believe that the new customers who are excited by the price cut are yet to enter the market. I think that should start playing out soon because there is a time period of 45 days between consideration and retail. The pent-up demand will be over after the festive season and the real impact of GST reforms will be seen from November onwards,” said Chandra.
India’s automobile market was hit by a sudden decline in sales following reports of next-generation GST reforms in mid-August. Following the new rates which came into effect on September 22, automobile sales since then have skyrocketed, helping automakers to clock one of their best monthly sales in September.
Chandra stated that the outlook for the sector remains encouraging due to key tailwinds “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.
The overall PV dispatches in September 2025 rose 4% to 3,72,458 units, as against 3,56,752 units in September 2024. Similarly, two-wheeler sales witnessed a 7% rise to 21,60,889 units last month, as compared to 20,25,993 units in the year-ago period, according to data released by SIAM.
Total three-wheeler dispatches increased to 84,077 units last month, an increase of 5.5% year-on-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," said Chandra
In the July-September quarter, PV sales stood at 10,39,200 units, a drop of 1.5%, as compared to 10,55,137 units in the same quarter of the last fiscal. Chandra noted that the first two months of the quarter witnessed de-growth and revival in sales was witnessed only in September aided by GST reduction, improved consumer sentiment, and the onset of the festive season.
SIAM noted that the festive season has helped stimulate retail activity during the latter part of the second quarter. The extended festive and wedding season is expected to sustain the growth momentum through Q3, reinforcing positive consumer sentiment across all vehicle categories, it added. “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.
