The Indian automotive sector faced a downturn in September with a decline in retail sales. However, the pre-festive demand provided a boost, setting a positive tone for October. Vehicle registration data reveals that 15.1 lakh vehicles were registered by Tuesday afternoon, marking a 13.28% decrease compared to the previous year’s 17.4 lakh units. Industry analysts explain that the registration data precedes actual deliveries, implying that some September sales will be added to the October figures. The initial weeks of September witnessed subdued demand, as potential buyers waited for festival discounts and GST revisions. Furthermore, the period of Pitru Paksha contributed to a delay in major purchases for many.
Sales witnessed an upswing from September 22, triggered by Navratri and the implementation of GST modifications. Passenger cars and two-wheelers experienced a surge in showroom visits, bookings, and inquiries. Maruti Suzuki recorded sales exceeding 75,000 units within four days from September 22 to 25, compared to roughly 1.35 lakh vehicles sold in August. This suggests a strong recovery toward the end of the month.
It is important to avoid making simple conclusions from September’s statistics as the festive calendar differs. Navratri occurred in October 2024, so September didn’t experience the same impact. This year, demand growth began in late September.
The automotive sector is optimistic about the coming months. October’s festive season, along with the subsequent wedding season, is expected to drive sustained demand. The new GST rates – 18% on petrol cars up to 1200cc and diesel cars up to 1500cc, 40% on bigger vehicles, and just 5% on electric vehicles – are expected to fuel future growth.