Stories
Car Sales Soar Post-GST 2.0: Over 4 Lakh Vehicles Sold Monthly
- •India's Passenger Vehicle (PV) market experienced rapid growth approximately one year after GST 2.0 implementation.
- •A total of 4,763,285 passenger vehicles were sold between October 2025 and August 2026, a 22.28% increase from the previous year.
- •SUVs and MPVs dominated the market, with Utility Vehicle (UV) sales rising by 24.69%.
- •GST 2.0 reduced the total tax on small petrol, LPG, and CNG cars from 29% to 18%, and for mid-size/large cars to 40%.
- •Automakers attribute the surge to tax reductions, new models, lower interest rates, and festive demand, making 400,000+ monthly sales the new normal.
Key Questions Answered
Between October 2025 and August 2026, India's passenger vehicle market grew by 22.28%, with total sales reaching 4,763,285 units. Monthly sales averaged around 433,000 vehicles, surpassing 400,000 units in 9 out of 11 months following the tax reform.
Under GST 2.0, the tax on small petrol, LPG, and CNG cars decreased from 29% to 18%, while small diesel cars dropped from up to 31% to 18%. Mid-size and large cars, alongside large utility vehicles meeting certain conditions, were subjected to a 40% rate, down from previous ranges of 43% to 50%, while electric cars remained at 5%.
Utility vehicles, including SUVs and MPVs, drove the majority of the market growth, contributing about 75% of the total increase with 3,112,650 units sold between October 2025 and August 2026. This represented a 24.69% surge compared to the previous year, significantly outpacing passenger cars and vans.
