Auto Sales Set For Strong YoY Growth In September On Festive Demand, GST Cuts: Report

The automobile sector is set to post healthy year-on-year growth in September sales across all major segments, aided by festive demand and stronger customer sentiment, according to a report by Nuvama Research.

The brokerage said wholesale of tractors, two-wheelers (2Ws), passenger vehicles (PVs), and commercial vehicles (CVs) are expected to gain momentum during the month, driven by the festive season that began on September 22.

“We expect upward YoY momentum in September 2025 wholesales across tractors, 2Ws, PVs and CVs led by strong growth in festive sales from 22nd September,” the report noted. A major boost has also come from recent cuts in the Goods and Services Tax (GST), which have lifted buyer sentiment. Other supportive factors, such as stronger rural demand, easy financing, and dealer inventory build-up, have further strengthened the outlook.

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Nuvama highlighted that GST relief, new product launches, the upcoming Pay Commission for government employees, along with reforms in interest rates and income tax, are all expected to support the sector in the coming months. Segment-wise, passenger vehicle volumes are projected to grow by about 7 percent YoY in September, supported by GST benefits, a revival in entry-level demand, and higher dealer stocking ahead of the festive season.

Two-wheeler sales are also forecast to rise around 8 percent YoY in the domestic market, with improving demand at the entry-level and GST cuts playing a key role. Exports in this segment are likely to post double-digit growth, aided by rising demand from Latin America, Africa, and Asia.

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Tractor sales are expected to register double-digit growth as well, with domestic volumes estimated to rise nearly 10 percent YoY. The improvement is being fueled by GST cuts, stronger rural sentiment, and better farmer confidence, supported by forecasts of surplus rainfall. The report, however, flagged that rising input costs have turned the terms of trade slightly negative, which could weigh on margins going forward.