India’s automobile industry experienced strong growth across all major segments in September 2025, driven by early festive demand and the initial effects of the government’s GST 2.0 reforms, according to data released by the Society of Indian Automobile Manufacturers (SIAM). Passenger vehicle sales rose 4.4% year-on-year to 372,458 units, up from 356,752 units in September 2024.
Two-wheelers saw an even stronger increase of 6.7%, reaching 2,160,889 units compared to 2,025,993 units last year, supported by improving rural demand and better affordability. Three-wheeler sales also climbed 5.5% to 84,077 units from 79,683 units a year earlier.
SIAM noted that the industry’s performance reflected positive sentiment ahead of the peak festive season, which began early this year on September 22 with Navratri. This early start helped boost retail sales in the latter part of the second quarter. The extended festive and wedding season is expected to sustain growth through the third quarter, reinforcing consumer confidence across vehicle categories.
“The Kharif harvest is expected to be broadly healthy, supported by an above-normal monsoon. Although flooding in parts of the North, West, and East temporarily affected some crops and logistics, overall agricultural output and rural sentiment remain stable, likely supporting rural consumption and mobility demand in the second half of the year,” said SIAM.
The industry body further highlighted that the rollout of GST 2.0 reforms, along with RBI’s rate rationalization and income tax relief for individual taxpayers, are expected to sustain buying momentum across all vehicle segments in the coming months. While the sector remains watchful of geopolitical developments, the overall outlook for FY26 remains encouraging, with the industry expected to close the fiscal year on a positive growth trajectory.
Commenting on the Q2 2025-26 performance, Mr. Shailesh Chandra, President of SIAM, said, “The GST 2.0 reform is a landmark decision by the Government of India, set to propel the Indian auto industry to the next level and boost the overall economy, given the industry’s strong linkages. Despite the new GST rates being in effect for only nine days in September, Passenger Vehicles, Two-Wheelers, and Three-Wheelers recorded their highest ever sales for the month. Additionally, strong export growth across all segments in Q2 reflects growing global acceptance of Indian-made vehicles. The outlook remains positive, supported by key tailwinds.”
Mr. Rajesh Menon, Director General of SIAM, added, “Passenger vehicle sales in Q2 2025-26 declined slightly by 1.5% to 1.04 million units compared to last year. However, three-wheeler sales grew 9.8% to 229,000 units, marking the highest Q2 performance ever. Two-wheelers rose 7.4% to 5.56 million units, while commercial vehicles increased 8.3% to 240,000 units compared to the same period last year.”
