Stories
Car Sales Soar 22% as 4 Lakh Monthly Market Becomes New Norm Post-GST 2.0
- •India's passenger vehicle market expanded sharply post-GST 2.0, with monthly wholesales averaging over 400,000 units.
- •Domestic PV wholesales increased 22.28% to 4,763,285 units from October 2025-August 2026, compared to 3,895,262 units in the prior year.
- •Utility Vehicles (UVs) accounted for three-fourths of the increase, growing 24.69% despite having fewer models than passenger cars.
- •GST 2.0 reduced tax rates on small cars to 18% and set a flat 40% rate for mid-size, large cars, and larger UVs, improving affordability.
- •Carmakers like Tata Motors, Maruti Suzuki, and Mahindra reported significant sales growth, attributing it to improved affordability and consumer confidence.
Key Questions Answered
Domestic passenger vehicle wholesales increased by 22.28 per cent to 47,63,285 units from October 2025 to August 2026, compared to 38,95,262 units during the same period a year earlier. Average monthly wholesales rose to around 4,33,026 units, crossing the 400,000 mark in nine of the eleven post-reform months.
GST 2.0 reduced the tax rate on small cars to 18 per cent. Mid-size cars, large cars, and qualifying larger utility vehicles moved to a flat 40 per cent rate without a compensation cess, while battery electric vehicles maintained a 5 per cent GST rate.
Utility vehicles accounted for three-fourths, or 75.10 per cent, of the total market increase, rising 24.69 per cent to 3,112,650 units. Passenger cars contributed 22.64 per cent of the growth, and vans accounted for 2.26 per cent.
