Auto sales update September 25 Automotive industry sector news India

GST reforms reignite demand; Festive cheer sustenance a key monitorable

The auto industry reported robust wholesales in September 2025, with total dispatches rising 19.3% YoY and 21.5% MoM to ~26 lakh units. The sharp uptick was largely driven by OEMs advancing shipments to dealerships in anticipation of a festive demand boost and the expected benefits from GST reforms. Growth remained broad-based across segments, with two-wheelers and tractors leading the momentum, while PVs and CVs posted steady gains. On the retail front, however, trends diverged meaningfully. Overall registrations slipped into a double-digit decline, with VAHAN data indicating 15.1 lakh units as of 30th September 2025, down 13.3% YoY from 17.4 lakh units a year ago. The weakness was concentrated in the first three weeks of the month, as consumers deferred purchases amid uncertainty over GST rate changes, muted festive discounts, and the Pitru Paksha period. Demand momentum improved markedly from September 22 onwards, with the onset of Navratri celebrations and GST rationalisation beginning to feed through, lifting footfalls, bookings, and enquiries, especially in PVs and 2Ws. The overall outlook for the coming months remains positive, with the delivery shortfall observed in September expected to reflect in October. Sustained demand is anticipated, supported by the ongoing festive season and the upcoming wedding season. However, caution is warranted when making year-on-year comparisons, as the timing of festivities differed in 2024. Navratri fell in October last year, while this year it began in late September, providing an earlier boost. A similar caution applies to October, as the base effect will not be strictly comparable.

Passenger Vehicles

Domestic PV demand remained modest in September, growing just 4.9% YoY, making it the laggard among auto segments, even as exports delivered a strong 55.6% YoY growth, the highest across the industry. The month also saw a shift in market positioning, with Tata Motors overtaking Mahindra to secure the second spot in sales. Maruti Suzuki posted a mixed performance as domestic sales declined 6% YoY, weighed down by weakness in the mini segment and in the utility segment, which marked the fourth straight month of decline amid intensifying competition, while the compact category continued to support growth. The company also noted that dispatches were partly affected by logistical constraints, with several SUV units still in transit. Tata Motors reported robust growth with domestic volumes up 45.3% YoY and exports surging 396% YoY, supported by all-time high monthly sales of the Nexon at 22.5k units and strong EV momentum. Mahindra & Mahindra achieved its highest-ever monthly domestic PV sales at 56.2k units, surpassing its October 2024 record of 54.5k units, representing a 10.1% YoY increase. Meanwhile, Hyundai reported domestic wholesales of 51.5k units, up 0.9% YoY but showing a strong 17% MoM recovery from August’s 44k units, suggesting that festive season demand is beginning to materialise.

Two Wheelers

In September 2025, the 2W space reported a healthy high single-digit growth (9.5% YoY) in the domestic market, supported by high teen-double-digit growth (17.8% YoY). Hero MotoCorp reported a modest 5.0% uptick in its domestic wholesale volumes, while exports rose by 94.8% to 40k units (highest ever dispatches). The uptick in sales reflected a boost in demand from the festival fervour, as well as the recent GST benefits driving the rise in bookings and enquiries. Bajaj Auto also recorded a modest month, with mid-digit growth (5.3% YoY) on the domestic front, while reporting 11.7% YoY growth on the export front. The growth was largely driven by the enhanced appeal of its Pulsar models, aided by an additional 50% financing benefit to customers, complementing the recent GST reduction. TVS reported 12.0% YoY growth in its domestic volumes, driven largely by its scooter portfolio, while exports showcased healthy 10% YoY growth. Royal Enfield registered a 42.9% YoY jump, achieving its highest-ever monthly domestic volumes on the back of growing demand for its refreshed portfolio. As per Vahan statistics (October 1, 2025), 104,056 electric 2Ws were sold last month, up 15% YoY (September 2024: 90,550 units), only 904 units down on August 2025’s 104,960 units. TVS continues to hold on to its number one title for the sixth month in a row, with a market share of 22%. Bajaj made its comeback, reclaiming its position as the number two, after dropping to number five in August, following production hurdles in July and the first half of August caused by global rare earth magnet (REM) availability. The third position witnessed a shift, with Ather Energy dethroning Ola Electric.

Commercial Vehicles

Commercial vehicles continued to extend their gains from the previous month, with a healthy uptick (6.2% YoY / 4.0 MoM) being observed in both domestic and export markets. M&M primarily fueled the growth, as strong traction in LCVs continued to benefit the company. Tata Motors (+6.3%) and VECV (+4.5%) also posted steady gains, while Ashok Leyland (+2.1%) registered modest improvement. On a MoM basis, the trend remained largely positive with M&M (+6.1%) and Tata Motors (+4.0%) supporting momentum, while VECV (-0.2%) stayed flat, reflecting some channel adjustment.

Tractors

Tractor sales maintained strong momentum in the domestic market, with combined volumes for Mahindra & Mahindra and Escorts Kubota rising nearly 50% YoY to 82.7k units and more than doubling on a MoM basis. The surge was supported by robust rural demand, aided by favourable rural conditions, above-normal and well-distributed monsoon rains, improved reservoir levels, and the early onset of the festive season. Sentiment was further lifted by the recent GST rate cut on tractors and farm machinery. In contrast, exports were relatively muted, with shipments up 12% YoY to 1.63k units but recording a sharp sequential decline.