Most Indian carmakers snap four-month sales slump in September on festive demand, tax cuts

Three out of four of India’s top carmakers posted a year-on-year rise in dispatches to dealers in September, snapping a four-month streak of falling sales, as higher footfalls during the festive season and consumption tax cuts fueled a demand rebound.

New Delhi slashed the goods and services tax on sports utility vehicles (SUVs) with engine capacities above 1,500 cc to40% from an effective rate of 50% as part of its effort to boost consumption and support growth amid headwinds from trade tensions with the United States.

Tax on small petrol and diesel cars also went down to 18% from 28%.

Tata Motors posted a 47% jump in sales to dealers, and Hyundai Motor India reported a 10% rise, its first since November 2024.

Both companies attributed the surge to a rise in SUV sales, with Tata adding that its compact SUV Nexon recorded the highest-ever monthly sales for any model in the company’s history.

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Mahindra & Mahindra, which has a line-up comprised entirely of SUVs, also reported a 10% rise in sales after posting its first decline in August in over three years. Sales grew 60% after September 22, when the tax cuts came into effect.

However, market leader Maruti Suzuki reported a more than 8% decline, dragged by lower SUV sales for a fourth straight month, even as sales of small cars rose 4.6%.

Vehicles dispatched on September 22, the first day of the local festival Navratri, were still in transit due to logistics delays, compressing deliveries into a short window and limiting retail sales for the month, its sales and marketing head Partho Banerjee said in a call on Wednesday.

Maruti Suzuki, Mahindra & Mahindra, Hyundai Motor India and Tata Motors are India’s four largest carmakers, and account for about 80% of sales.