Auto-Retail September 2025: GST 2.0 Sparks Festive Momentum

India’s auto retail sector maintained its upward trajectory in September 2025, registering a 5.2% year-on-year (YoY) growth, driven by the rollout of GST 2.0, stable interest rates, and pre-festive buying enthusiasm. Although the first three weeks of the month were relatively muted, demand surged sharply after September 22, coinciding with the onset of Navratri, which ignited strong momentum across vehicle categories.

Category Performance: Two-Wheelers and PVs Lead the Charge

Two-wheelers (2W) and Passenger Vehicles (PV) were the star performers of the month, growing 6.5% and 5.8% YoY, respectively. The improvement was supported by rising affordability, GST 2.0’s lower tax burden, and easy access to retail finance schemes.

• Two-Wheelers (2W): 12.87 lakh units sold, benefiting from strong rural and semi-urban demand, supported by festival discounts and improved liquidity.
  
  
• Passenger Vehicles (PV): 2.99 lakh units sold, as OEMs ramped up festive offers and inventory levels (~60 days) to meet peak-season demand.
  
  
• Commercial Vehicles (CV): Marginal growth of +2.7%, reflecting steady fleet replacement and logistics demand.
  
  
• Tractors (TRAC): Grew 3.6% YoY, backed by rural resilience and improving monsoon patterns.
  
  
• Construction Equipment (CE): Declined 19%, primarily due to weather-related project slowdowns.
  
  

Overall, total retail volumes reached 18.27 lakh units, marking a stable pre-festive build-up.

Navratri 2025: Record-Breaking Retail Momentum

The Navratri period proved to be a blockbuster for the auto sector, as overall retail sales jumped 34% YoY, underscoring strong consumer sentiment and broad-based festive optimism.

The strong showing was led by Two-Wheelers and Passenger Vehicles, both benefiting from GST 2.0-led affordability and pent-up urban demand.

Outlook: Festive Tailwinds to Drive the Next Leg of Growth

With stable interest rates, improved financing access, and the full impact of GST 2.0 feeding into consumer prices, India’s auto retail market is entering what many analysts call a “golden festive phase.”

OEMs are well-prepared with higher inventory levels, new model launches, and festive offers, while rural demand remains resilient due to favorable monsoon conditions. As consumer confidence strengthens, the sector is poised for sustained double-digit growth through the remainder of 2025.

Key Highlights

• Auto retail up 5.2% YoY in September 2025.
  
  
• Navratri sales hit a record +34% YoY growth.
  
  
• 2W and PV segments dominate festive demand.
  
  
• GST 2.0 enhances affordability and drives sentiment.
  
  
• Outlook remains bullish heading into Diwali.