Retail vehicle sales by dealers in India are expected to remain steady in December, said a dealers’ body on Monday, driven by rebounding demand with the help of recent tax cuts that have made certain cars cheaper, and ongoing year-end incentive schemes for consumers. Overall sales grew 2.14% in November, according to the Federation of Automobile Dealers Associations-FADA, with sales defying expectations of a slowdown after the festive season.
Automobile dealers attributed the confidence to stronger enquiry pipelines, the ongoing wedding season, improved inventory levels as well as year-end consumer schemes. India, late last month, reduced goods and services tax for sports utility vehicles with engine capacities of more than 1,500 cc to 40% from about 50%, and for small cars to 18% from 28%, in a move to promote consumer spending and support growth amidst steep US tariffs. In October, the first full month after the tax cuts took effect, the dealers’ sales to customers climbed 40.5% – the highest on record.
Passenger vehicle inventory, or average time a vehicle stayed in a showroom, has come down to 44-46 days in November from 53–55 days in October, FADA said. Last week, car market leader Maruti Suzuki said there was a 37% on-year jump in retail sales of four of its most affordable small cars for November. This was more than double the 17% growth seen for some of its larger SUVs in the 40%-tax category. Supply was not keeping pace with demand, Maruti’s chief sales executive, Partho Banerjee, said in a sales call. Of FADA’s members, about 64% said they expect growth in sales in December, while 74.3% said they see sales growth for the next three months. FADA projects price hikes in January, wedding-season demand, and new 2026 models to drive sales for the next three months. Sales would be supported by liquidity from crop sales after harvest and government initiatives.
