Indian auto industry rebounds strongly after GST cut boost: ICICI Securities

Indian automobile market saw a comeback in September 2025, as the long-awaited GST rate cut and early festive buying sent a wave of optimism across showrooms and factory floors. According to ICICI Securities, wholesale volumes surged across all major vehicle categories, signalling one of the strongest monthly performances of the year and restoring momentum after months of muted sentiment.

GST cut revives buyer confidence

The industry’s turnaround came swiftly after the GST reduction announced on September 22. Dealers across the country reported a visible jump in footfalls almost overnight, with inquiries translating quickly into bookings. “The timing couldn’t have been better," said an industry executive. “The GST cut gave fence-sitters a reason to buy before prices adjusted again."

Passenger vehicle (PV) makers and two-wheeler brands were among the biggest gainers, as both urban and rural buyers responded positively to the price relief. The ripple effect was felt not just in retail demand but also in wholesale dispatches, as automakers rushed to refill dealer inventories ahead of the festive rush.

Two-wheelers lead the charge

Hero MotoCorp rode the momentum with an eight per cent year-on-year rise, selling about 6.87 lakh units. Scooters played a starring role in the recovery, reflecting stronger urban demand. TVS Motor grew 12 per cent to 5.41 lakh units, driven by sustained enthusiasm for its iQube electric scooter, which contributed over 31,000 units. Bajaj Auto, too, delivered a nine per cent rise, buoyed by a 15 per cent jump in three-wheeler exports.

But it was Royal Enfield that stole the spotlight with a 43 per cent surge in volumes, crossing 1.24 lakh units, a sign that the mid-size motorcycle wave shows no signs of slowing.

Passenger vehicles find their rhythm

Maruti Suzuki reported a modest three per cent rise to 1.9 lakh units, constrained slightly by logistics bottlenecks. Yet, its export performance soared 52 per cent. Tata Motors delivered a standout 47 per cent jump to 61,000 units, powered by nearly doubled EV sales. Mahindra & Mahindra grew 10 per cent, while Hyundai Motor India mirrored that pace with a 10 per cent rise, aided by a 44 per cent export boost.

Commercial and farm segments keep pace

The commercial vehicle (CV) segment maintained its steady climb. Tata Motors’ CV sales rose 19 per cent to 36,000 units, driven by both heavy and light trucks. Ashok Leyland posted a nine per cent increase, while Mahindra & Mahindra’s light CVs were up 18 per cent.

The real surprise, however, came from the tractor segment, the traditional barometer of rural demand. Mahindra & Mahindra sold 66,000 units and Escorts 18,000, together marking a 49 per cent year-on-year surge. Strong monsoon coverage and better farm incomes helped boost sentiment, pushing tractors to the top of the growth chart.

A festive tailwind for the months ahead

ICICI Securities noted that the broad-based growth indicates “a healthy demand revival led by festive buying and the GST rate cut." As the festive season gains momentum, automakers are bracing for another round of strong retail activity in October, a sign that India’s auto story is once again shifting gears, this time with renewed consumer confidence behind the wheel.

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