GST rate cut boost: Passenger vehicle sales jump by 17% YoY in October - Business Today

Sales of passenger vehicles grew 17.2% year-on-year to 4.60 lakh units in October 2025 from 3.93 lakh units in the same month last year, aided by the Goods and Services Tax (GST) reform and the festive season, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

“Passenger vehicle, two and three-wheeler segments posted their highest ever dispatches to dealers in October, primarily buoyed by the festive demand and the recent GST rate reduction, despite being constrained due to certain logistic limitations,” said Rajesh Menon, Director General, SIAM.

Maruti Suzuki India Ltd, India’s biggest carmaker by volume, recorded domestic sales of 1.76 lakh units in October 2025, up 10% compared with the same month last year.

However, sales of cars in the mini segment, which Society of Indian Automobile Manufacturers classifies as entry-level hatchbacks up to 3.6 metres in length and one litre engine displacement, fell 15.5% year-on-year to 9,621 units in October. There are only three models in the mini segment – Maruti Suzuki’s Alto and Spresso, and Renault’s Kwid.

Two-wheeler sales rose 2.1% year-on-year to 22.11 lakh units in October 2025 after the tax rate on motorbikes up to 350cc was reduced to 18% from 28%.

Sales in the 350cc-plus segment were hit as the GST rate on such motorcycles was raised from 28% to 40%.

Royal Enfield, the maker of the Bullet motorcycle, witnessed de-growth in sales of its 350cc-plus motorcycles as domestic sales fell 5.4% to 8,140 units, as per SIAM’s segment-wise data.

Royal Enfield parent Eicher Motors is in talks with the government to for a single Goods and Services Tax (GST) rate of 18% on all motorcycles. “We have been engaging with government agencies to see whether we can have a one equal slab of 18% because it will certainly help in the 450cc and 650cc segments to get scale in India and thereby take the product to internation markets where there is potential,” B Govindarajan, MD of Eicher Motors, and CEO of Royal Enfield, said during the medial conference call after the company announced its second-quarter earnings.

“In the more than 350cc segment, as the GST rate has gone up, the offtake is slightly lower... If we don’t have scale, it puts pressure on this segment,” said Govindarajan.

In the three-wheeler segment, 81,000 units were sold last month with a growth of 5.9%, compared to October 2024.

“With the reduced GST rates becoming effective from 22nd September 2025, October witnessed a strong uptick in Vehicle Registrations, resulting in a notable rise compared to wholesales,” Menon said.

Published on: Nov 14, 2025 5:27 PM IST