Archive · 19 Sep 2025
GST Cuts to Drive Auto Sector Demand, Boost Sales
Starting September 22, the government is changing taxes (GST) on many things, including cars and trucks.
These tax cuts should make cars less expensive, so more people might buy them.
Car companies are lowering prices, giving discounts to customers.
Experts at Motilal Oswal believe sales will increase across different types of vehicles, like motorcycles, cars, trucks, and tractors.
This should lead to more business for the auto industry and may mean companies offer fewer discounts in the future.
GST reforms taking effect September 22 include tax cuts on many goods.
Automobile companies are expected to lower prices by giving discounts.
Motilal Oswal predicts the changes will lead to increased demand.
Volume growth estimates across segments will increase in FY26 and FY27.
Tractor sales may grow by 10% in FY26 and FY27
- Who
- Automobile Companies and Motilal Oswal
- What
- GST reforms are expected to impact the auto sector
- When
- Effective September 22, and FY26/FY27
- Where
- India
- Why
- To increase demand, and provide discounts on products, Motilal Oswal expects volume growth
Government and Auto Companies
Motilal Oswal's Predictions
Impact on Demand and Profit
Government and Auto Companies
GST cuts will increase demand, automobile companies have decided to pass the benefit of the GST relief to the consumers.
Motilal Oswal's Predictions
Discounts may decrease, driving margin expansion
- Effective Date of GST Reform
- September 22
- GST Slab Changes
- 12% and 28% slabs eliminated; items moved to 5% and 18% slabs
- Impact on Auto Sector
- Prices of most products expected to decrease
- Projected Growth (FY26, FY27) Two-wheelers
- 4%, 7.5%
- Projected Growth (FY26, FY27) Passenger Vehicles
- 3%, 8%
- Projected Growth (FY26, FY27) Commercial Vehicles
- 5%, 7%
- Projected Growth (FY26, FY27) Tractors
- 10%, 10%
