GST 2.0 Spurs Over half a million cars sold in a month

The implementation of GST 2.0 has significantly boosted India's automotive industry, doubling car sales to over 500,000 units within a month. Festive season sales reached 650,000–700,000 units, with top automakers like Maruti Suzuki, Tata Motors, and Hyundai recording exceptional growth. The GST rate cuts on small and large cars spurred unprecedented demand, despite supply chain challenges. This reform positions the automotive sector as a major beneficiary of India's tax overhaul.

The recent implementation of GST 2.0 has created a transformative wave in India's automotive industry, driving car sales to unprecedented levels. Within just a month of the tax reform coming into effect, vehicle sales have more than doubled, surpassing the half-million mark—a clear indication of the reform's impact.

Record-Breaking Festive Sales

Industry analysts project that the passenger vehicle segment alone could see retail sales between 650,000 to 700,000 units during the period between the GST rate revision on September 22 and the Diwali festivities. Historically, the industry’s average 30-day sales ranged between 250,000 and 300,000 units, making this growth an extraordinary milestone.

Maruti Suzuki, the nation’s largest automaker, led the charge with 350,000 vehicles sold between September 22 and October 18. The company’s daily retail average surged to nearly 13,500 cars, while bookings soared beyond 450,000 units, showcasing the heightened consumer demand.

Similarly, Tata Motors achieved remarkable success during this period, delivering over 100,000 vehicles—a 33% increase compared to the same time last year. Shailesh Chandra, managing director and CEO of Tata Motors Passenger Vehicles, attributed this growth to the strong performance of their SUVs. The Nexon alone accounted for over 38,000 units sold, reflecting a 73% year-on-year growth, while the Punch recorded 32,000 units, growing by 29%. Furthermore, Tata’s electric vehicle (EV) lineup gained significant traction, with over 10,000 EVs retailed, representing a 37% increase.

Hyundai and Others Ride the Wave

Hyundai Motor India also posted impressive numbers, delivering an average of 2,500 cars daily while receiving 3,500 bookings per day since the GST revisions. The company reported delivering 75,000 vehicles during this period. Notably, the first day of Navratri saw Hyundai clock its highest dealer billings in five years with over 11,000 units, while Dhanteras deliveries surged to 14,000 units—a 20% year-on-year increase.

Other top automakers, including Mahindra, Kia, and Toyota, collectively contributed an estimated 100,000 to 150,000 retail sales during the festive season. These six leading carmakers now account for over 90% of the domestic passenger vehicle market. According to a dealer representing these brands in Delhi, the festive sales volume exceeded their initial projections of doubling sales. However, the dealer noted that supply chain constraints limited their ability to meet the overwhelming demand.

Extended Hours and Logistics Challenges

In response to the surge in demand, dealerships in major cities extended their operating hours to cater to eager customers looking to capitalize on festive offers and reduced prices. The GST rate cut, which reduced the tax on small cars from 28% to 18% and on larger vehicles to 40%, proved to be a game-changer. The reduced rates triggered a demand spike so intense that it strained logistics networks, creating challenges in delivering vehicles to dealerships on time.

A Boon for the Automotive Industry

The GST 2.0 reforms have clearly positioned the automotive sector as one of the biggest beneficiaries of the tax overhaul. With a significant boost in sales and an undeniable surge in consumer interest, the reforms have set the stage for an optimistic future. Although supply chain issues persist, the industry’s robust performance during this festive season highlights its resilience and the enormous potential unleashed by the new tax structure.

As the dust settles on this record-breaking season, automakers and dealers alike are bracing for a strong finish to the year, cementing the transformative impact of GST 2.0 on India's automotive landscape.