Festive Mood, GST Cut Drive Record Car Sales
The festive window- spanning from September 22 (Navratri) to October 21 (Diwali)- traditionally seen as an auspicious time for big-ticket purchases like cars, saw a sharp surge in demand.
The Gist
India's passenger vehicle industry experienced a record festive season, fueled by positive consumer sentiment and various economic factors.
- The festive period from September 22 to October 21 saw a significant surge in vehicle sales, with estimates suggesting a 20-30% year-on-year increase.
- Tata Motors achieved over 1 lakh vehicle deliveries, marking a 33% growth compared to last year, particularly in the SUV and electric vehicle segments.
- Entry-level cars are also witnessing a resurgence, driven by demand from first-time buyers in urban and rural areas.
India’s passenger vehicle industry has witnessed a record festive season this year, driven by a combination of buoyant consumer sentiment, recent GST cut, OEM incentives, pent-up demand, an early marriage season, and relief from repo rates that boosted spending power.
The festive window- spanning from September 22 (Navratri) to October 21 (Diwali)- traditionally seen as an auspicious time for big-ticket purchases like cars, saw a sharp surge in demand. With celebrations continuing through the week with Govardhan Puja and Bhai Duj, the momentum is expected to hold.
While final retail figures are pending due to a reporting lag on the government’s VAHAN portal, initial industry estimates suggest a 20-30% year-on-year jump in vehicle sales during the period.
CS Vigneshwar, president at Federation of Automobile Dealers’ Association (FADA), said, “It is a record year, car sales have gone through the roof this festive season.”
For Tata Motors Passenger Vehicles, it was a milestone year with over 1 lakh vehicle deliveries, over the 30-day period from Navratri to Diwali, reflecting a robust 33% growth compared to the same period last year.
Shailesh Chandra, managing director and CEO at Tata Motors Passenger Vehicles said that SUVs, including Nexon and Punch, continue to lead the demand for the company.
Its electric car portfolio also showed strong traction, with over 10,000 EVs retailed during this period, marking a 37% growth.
Vinkesh Gulati, director of United Automobiles and chairperson of Automotive Skills Development Council (ASDC), said that the year-on-year growth rate is expected to be over 20% for the Navratri to post Diwali period. However, he noted that logistical challenges still exist.
Come Back Of Entry-Level Cars
According to Vigneshwar, it's not just SUVs but also entry-level cars that are driving demand from both urban and rural buyers. These vehicles, typically purchased by first-time buyers upgrading from two-wheelers, are seeing a resurgence. “Demand for entry-level cars has gone back to 2018-19 levels,” he said.
Gulati also said that entry-level car registrations have surged, especially in rural and Tier-2,3 towns.
It’s worth noting that the entry-level car segment had faced a prolonged slowdown, as consumer demand shifted toward larger, feature-rich SUVs. Affordability became a key concern for potential small car buyers, with rising prices driven by regulatory changes far outpacing salary growth during and after the pandemic.
Puneet Gupta, director of India & ASEAN Auto Market at S&P Global Mobility, stated that the record car sales were also driven by pent-up demand from the latter half of August and the first 20 days of September, when consumers deferred purchases in anticipation of the GST cut.
According to him, the positive sentiment will continue for the next year as well. S&P has also revised its passenger vehicle growth forecast for 2026 from 4% earlier to 8.5% now.
Navratri And Dhanteras Surge
FADA Vice President Sai Giridhar termed Navratri 2025 as “one of the most memorable chapters in India’s automobile retail journey”. For the first time ever, dealerships across the nation witnessed record-breaking footfalls and deliveries, with overall retail surging by 34% year-on-year, a historic high during any Navratri season.
Dealers said Dhanteras deliveries were spread over two days this year, as the festival fell on a Saturday, a day when some customers avoid buying metal, leading many to take deliveries on Sunday instead.
Car market leader Maruti Suzuki reported 51,000 total deliveries as the highest ever on Dhanteras, as against 41,500 deliveries last year. Partho Banerjee, Senior Executive Officer- Marketing & Sales, Maruti Suzuki said retail was 3.25 lakh until Dhanteras, and it has “broken all records for Maruti Suzuki”.
The festive season has especially augured well for Maruti which has the largest entry-level portfolio and has seen its market share drop to below 40% recently, the lowest in the past years.
Hyundai Motor India said it kicked off the season on a “record note”, clocking over 11,000 dealer billings on the very first day of Navratri, which was its highest single-day tally in the last five years.
“Enquiries rose 10% year-on-year, with over 18,000 customers enquiring daily. Bookings have been stronger, averaging nearly 3,500 per day, a solid 17% growth over last year. Retail sales have surged at an even faster pace, up 30% YoY, with nearly 2,500 cars delivered daily, Hyundai said. During the Dhanteras period, it delivered about 14,000 cars, 20% higher than last year.
However, industry watchers caution against making direct year-on-year comparisons for the month of October, as this year’s festive season was an exception, with celebrations occurring earlier than usual in the month. While the major festival period also spanned October last year, a significant portion of vehicle purchases and registrations spilt over into November, as Diwali fell on October 31.
While it remains to be seen whether the festive season momentum will carry through the rest of the fiscal year, the industry remains optimistic, especially after flat domestic sales in the first half of the financial year.
