Auto dealers cited confidence, pointing to stronger research pipelines, the ongoing wedding season, improved inventory levels and year-end consumer programs.
India in late September cut goods and services taxes on SUVs with an engine capacity of more than 1,500 cc from about 50% to 40% and on small cars from 28% to 18%, in a bid to stimulate consumer spending and boost growth amid high US tariffs.In October, the first full month after the tax cuts went into effect, dealer sales to customers grew 40.5% – a record high.
Passenger car inventory, or the average time a vehicle spent in a showroom, fell from 53 to 55 days in November, FADA said.
Earlier this week, car market leader Maruti Suzuki said there was a 37% increase in retail sales of four of its most affordable small cars in November. This was more than double the 17% growth seen for some of its larger SUVs in the 40% tax category. Demand for cars has exceeded supply, Maruti’s chief executive Partho Banerjee said in a sales call.
About 64% of FADA members said they expect sales growth in December, while 74.3% said they see sales growth in the next three months.
Over the next three months, FADA expects January price increases, wedding season demand and new 2026 models to drive sales, supported by liquidity from post-harvest crop sales and government initiatives.
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