India’s automobile industry is set to witness record-breaking festive season sales, with volumes expected to exceed 5.2 million units during the 42-day festive window starting September 22 (Navratri) and ending 15 days after Dhanteras. This surge will mark a 20% year-on-year growth, compared to 4.28 million units sold in the same period last year, according to estimates by the Federation of Automobile Dealers Association (FADA).
The growth is being fueled by strong consumer demand, GST cuts, and attractive pricing across all segments, from mass-market passenger vehicles to high-end luxury cars.
Strong Demand Across Vehicle Segments
- Passenger Vehicles (PV): Bookings have surged sharply following GST rationalisation, with price drops ranging from ₹40,000 to ₹1.55 lakh in the mass-market segment.
- Two- and Three-Wheelers: Dealers report steady momentum, supported by rural demand recovery and festive sentiment.
- Commercial Vehicles and Tractors: Both segments are expected to post double-digit growth, aided by infrastructure activity and rural demand.
- Luxury Cars: The most dramatic price corrections are being seen here, with reductions of up to ₹30 lakh on brands like Mercedes-Benz, BMW, Audi, Volvo, and Jaguar Land Rover (JLR).
“The demand is upbeat. Jaguar Land Rover is waiting for September 22 for the new prices to take effect, but it has already begun liquidating inventory at the revised GST rates. Bookings are robust despite the ongoing Shraadh period,” said a senior executive of a JLR dealership.
GST Cuts Boost Consumer Sentiment
The cut in Goods and Services Tax (GST) from 28% to 18% has given a significant push to consumer sentiment. Auto companies are passing on the benefit through visible price reductions, with the Ministry of Heavy Industries directing OEMs to display old vs. new prices at showrooms.
A Raipur-based dealer of Honda and Tata Motors said, “This will be a record year. The GST cut has only just been communicated to customers, and we’ve already seen a surge in demand and bookings.”
Industry Prepared to Meet Festive Demand
While demand is surging, inventory levels are healthy across categories:
- PV industry: Sitting on ~600,000 units.
- Two-wheeler industry: Inventory between 280,000 to 450,000 units.
OEMs are expected to ramp up production to meet the expected spike in festive purchases.
Historical Context
- In FY25, India’s auto industry recorded sales of 25.6 million units, a 7% rise over 23.85 million units in FY24.
- The festive period alone typically contributes 15% of annual sales, making it the most crucial sales window of the year for automakers and dealers.
“Looking at booking and enquiry trends since the GST announcement, there should be no surprise if the industry achieves at least 20% growth this festive season,” said a senior dealer principal at the 7th Auto Retail Conclave of FADA.
Outlook
With price rationalisation, strong pre-bookings, and favorable consumer sentiment, the 2025 festive season is set to be a historic one for India’s auto industry. Analysts expect sales momentum to continue beyond the festive period, supported by a strong pipeline of launches, favorable financing, and rural recovery.
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