Car sales take off, industry sees GST cut fuelling growth

India's top carmakers saw double-digit growth following a spike in demand after cuts in goods and services tax (GST) rates late in September coincided with the Navratri to Diwali festive season sales.

- Ayaan Kartik [e-mail]

There are early signs that this momentum may remain strong in the months and quarters ahead, top carmakers and industry veterans said. Tata Motors Passenger Vehicles Ltd expects 7-8% growth in the industry's sales between October and March this financial year. Maruti Suzuki expects passenger vehicle sales to grow by around 7% next financial year. And Hyundai Motor India has guided for 5.2% CAGR of overall industry sales till financial year 2030.

‘These are substantially higher than earlier estimates. Car sales have been tepid since fiscal 2025 growing at 2% year-on-year. At the start of this fiscal, members of auto industry lobby group, Society of Indian Automobile Manufacturers (Siam) had expected slower growth of 1-2% in sales. Moody's Ratings had said in May that India’s car sales are likely to grow at a CAGR of 3.5% until 2030.

Siam now expects the post-September, healthy growth to be sustained as new customers buoyed by price cuts are likely to come into the market.