After several years of steady growth, the year 2025 proved to be an exciting one for the Indian auto industry. Companies faced a slowdown in demand at the beginning of the year, but by the end of the year had set several records in sales. Periodic data from the Society of Indian Automobile Manufacturers (SIAM) showed that sales of passenger vehicles reached an all-time high.
This weakness continued for several months. Dispatches of passenger vehicles in July were slightly lower than last year and sales fell in the June quarter, snapping a four-year streak of growth. However, the downward trend did not last long and from September the industry regained momentum and set several sales records. This happened because 5 things happened in favor of the auto industry.
1. Changed direction on August 15
Prime Minister Narendra Modi announced the changes in the GST structure from the Red Fort. This was a move that would change the entire cost structure of the auto industry. The announcement proved to be a major turning point in the story for an industry that has been facing stagnation and uncertainty for several months.
2. Actual change from September
On September 3, the GST Council approved changes in the tax on automobiles. This led to a reduction in vehicle prices and paved the way for the revival of long-stalled demand. Sales were slow in the weeks after the changes took effect, but companies and dealers began planning production, pricing and stock in anticipation of future increases.
3. GST 2.0 changed the market picture
Its impact was clearly visible on the ground in September. Buyers had postponed car purchases before the new tax was implemented. This was also the beginning of the festivities. But this laziness did not last long. On September 22nd i.e. the first day of Navratri and with the implementation of the new GST, the sudden spike in demand took even experienced dealers by surprise.
4. Full speed from Navratri
During Navratri, vehicle deliveries to showrooms in Delhi, Gurugram and Mumbai on that day were three to five times higher than on normal days. The demand for small cars is tremendous. Similar was the situation in smaller cities and towns, where there was an influx of people and inquiries for both two-wheelers and cars. Car companies also started showing signs of growth. Maruti Suzuki has received 75,000 bookings since September 18 as it offered other offers besides the GST cut. Company official Partho Banerjee said demand for small cars has grown by about 50%, though total bookings for SUVs remain high.
5. Records broken in October
What initially appeared to be just a festive boom soon turned into a strong recovery. October turned out to be a historic month for the industry. Around 40 lakh vehicles were retailed this month, including both cars and two-wheelers. According to FADA data, enrollment has increased by 40.5% year-on-year.