Automobile dealers are gearing up for a strong festive season following the government’s decision to cut GST on vehicles from 28 per cent to 18 per cent and remove the compensation cess on SUVs and luxury cars.
Several two-wheeler and four-wheeler manufacturers have announced GST-aligned price benefits, effective September 22, 2025.
Mahindra has gone a step further, offering the benefits from September 6, ahead of schedule, on its internal combustion engine (ICE) portfolio.
The move is expected to boost demand, especially for high-end models, and provide a sales push during the festive season.
On Monday, Kia India said it is reducing prices of its vehicles by up to ₹4.48 lakh to pass on the GST rate cut benefit to customers. JSW MG Motor India said it has reduced model prices in the range of ₹54,000 to ₹3.04 lakh with effect from September 7. TVS Motor Company said it will pass on the full benefit of the GST rate reduction to customers.
Japanese luxury car maker Lexus on Monday announced the reduction in prices of its entire product range by up to ₹20.8 lakh, while German luxury car maker Audi announced a price cut ranging from ₹2.6 lakh to over ₹7.8 lakh in its vehicles in India across models.
“For auto retail, September will be a two-phase month: a muted first half due to GST wait-and-watch, followed by a sharp surge as policy clarity, festive sentiment, and OEM schemes that mirror upcoming GST reductions converge.
“These schemes allow customers to book vehicles now while enjoying GST-aligned benefits, ensuring timely deliveries on their preferred auspicious dates such as Navratri and Durga Puja.
“Dealers across categories expect this strategy to unlock deferred demand and smoothen festive season supply,” Federation of Automobile Dealers Associations (FADA) said on Monday.
With GST 2.0 as a landmark reform, proactive OEM schemes, and the onset of India’s biggest festivals, FADA said it remains optimistic that September will mark the beginning of a strong growth cycle for auto retail.
Releasing the August numbers, FADA said that total vehicle retail sales in India grew by a modest 2.84 per cent at 19,64,547 units in August against 19,10,312 units in the same month last year, as customers postponed purchases expecting a price cut ahead of GST reforms.
“Customers continued to show strong enthusiasm with high enquiries and robust bookings, ensuring that vehicles are aligned for auspicious festive deliveries. The only issue was conversion, which saw a slowdown due to the benefits of GST 2.0 kicking in September,” FADA president C.S. Vigneshwar said.