India's automobile sector witnessed a remarkable surge in sales during September 2025, driven by festive demand and the positive impact of GST 2.0 reforms. The Society of Indian Automobile Manufacturers (SIAM) reported robust growth across all major segments, with passenger vehicles, two-wheelers, and three-wheelers all contributing to the record-breaking numbers.

Passenger vehicle sales reached 3,72,458 units in September 2025, a 4.4% increase compared to 3,56,752 units sold in the same month last year. Two-wheeler sales experienced even stronger growth, rising 6.7% to 21,60,889 units from 20,25,993 units in September 2024. This surge in two-wheeler sales was supported by higher rural demand and improved affordability. Three-wheeler sales also saw a positive trend, growing 5.5% to 84,077 units.

The implementation of GST 2.0 played a significant role in boosting automobile sales. The revised tax structure, effective from September 22, resulted in reduced GST rates for small cars (under four meters in length and with engine capacities up to 1,200 cc for petrol and 1,500 cc for diesel), which now attract an 18% GST rate, down from the previous 29-31%. Larger vehicles, previously taxed at 50% (including cess), now face a reduced rate of 40%.

The Federation of Automobile Dealers Associations (FADA) noted that the initial weeks of September 2025 were relatively subdued, with customers anticipating the GST 2.0 reforms. However, the dynamics shifted dramatically in the final week as the implementation of lower GST rates coincided with Navratri festivities, boosting customer sentiment and accelerating deliveries across most vehicle categories.

The automobile industry also experienced record growth during the Navratri period (September 22-30), with overall sales surging 34% year-on-year. Passenger vehicle sales grew 34.8%, while two-wheeler sales increased by 36%. FADA Vice President Sai Giridhar hailed Navratri 2025 as one of the most memorable chapters in India's automobile retail journey, attributing the success to the GST 2.0 reform.

Several factors contributed to the positive sales momentum, including improving rural sentiment, easing financing conditions, and steady traction for entry-level commuter bikes and scooters. The extended festive and wedding season is expected to sustain growth through the third quarter, reinforcing positive consumer sentiment across all vehicle categories.

Tata Motors emerged as a standout performer in September 2025, recording its highest-ever monthly sales and reclaiming the second spot among India's best-selling car brands. The Tata Nexon SUV led the rally, achieving its highest-ever monthly sales for any Tata model. Maruti Suzuki continued to lead the market in terms of volume, although its sales declined slightly compared to the previous year.

While domestic passenger vehicle sales remained relatively flat, exports experienced a significant jump. Total vehicle production stood at 3,073,654 units, a 10.8% increase from September 2024. Overall, vehicle exports in September 2025 reached 558,768 units, up from 466,409 units in September 2024, marking a 19.8% year-on-year gain.

Looking ahead, the industry remains optimistic about maintaining buying interest across all vehicle segments during the festive and post-festive months. SIAM anticipates that the positive momentum will continue, driven by the GST 2.0 reforms, a healthy Kharif harvest, and an above-normal monsoon.