December is the car buyers’ cheat code—make it count

GST cuts, festive demand and clearance deals offer a rare perfect storm for car buyers in India

- Ashwin Moorthy

The Indian automotive sector is gearing up to end the calendar year on a strong note, fuelled by a combination of record festive sales, favourable tax reforms and the onset of the traditional year-end stock-clearance period.

This has created one of the most consumer-friendly buying windows in recent years—an opportunity amplified by the lasting impact of the recent goods and services tax rate cuts.

‘The astounding performance of the market during the Diwali period was anchored by the GST revisions implemented on 22 September. The reduction of GST on small cars and two-wheelers—from 28% to 18%—provided immediate relief in ex-showroom prices. These cuts impacted vehicles under four metres in length with smaller engine capacities, categories that directly cater to the mass market.

The affordability boost fuelled purchasing power, helping the industry to mark its highest-ever passenger vehicle sales in a single month. Domestic wholesales jumped almost 17% year-on-year in October, with dealerships delivering close to 300,000 units.

Market leader Maruti Suzuki’s entry-level and compact segments rebounded after being under pressure for years. Tata Motors and Mahindra & Mahindra extended their remarkable run, posting their own best-ever monthly volumes thanks to their popular SUV portfolios. “This year’s monsoon positively impacted rural liquidity and economic performance, which had a rub off on the auto sector,” said Ashim Sharma, a senior partner at Nomura Research Institute. “The great performance in October got carried over to November, thanks to the start of the wedding season.”

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