India’s top carmakers log December sales jump as tax cuts fuel demand

India’s leading carmakers reported a strong rise in December sales to dealers on Thursday, with tax cuts from earlier in the year fuelling demand into the final month of 2025.

In September, India cut goods and services tax on small cars to 18% from 28% and on sports utility vehicles with engine capacities of more than 1,500 cc to 40% from about 50%, in a bid to spur consumer spending and bolster growth amid steep U.S. tariffs.

This benefitted market leader Maruti Suzuki’s small car portfolio, its biggest segment, which rose 50% to 92,929 units - its highest level since January 2025.

Sales of its utility vehicles climbed 33%, and total sales to domestic dealers jumped 37% to a record high of 178,646 units.

Overall sales, including exports, for the Swift manufacturer grew 22% for the month as exports dipped by around a third.

Read more: Toyota, Honda turn India into car production hub in pivot away from China

Peer Tata Motors Passenger Vehicles reported a 13% rise in domestic sales, with top-selling models such as the Nexon and Punch utility vehicles and the Tiago small car driving growth.

The Nexon, taxed at 18%, was Tata’s and India’s most sold car in October and November and is on track to lead industry-wide sales in the December quarter, the company said.

Tata expects sales growth to pick up in coming months as deliveries of newly launched models, like the Sierra SUV, commence.

Earlier in the day, Mahindra & Mahindra – which has a car portfolio comprised entirely of SUVs - said its monthly sales grew 23% in December.

Its sales growth of 18% so far in fiscal year 2026 is among the fastest in the world’s third-largest car market, helped by new launches and customer preference for its tech-loaded SUVs.

This has helped the Scorpio manufacturer leapfrog Hyundai India and Tata to the no. 2 spot in the current financial year.