Why Now? A Festive Surge in Compact Car Sales
This festive season has brought an unexpected twist as compact cars have taken the spotlight, capturing nearly 80% of total vehicle sales. With reduced GST rates enticing buyers, 2025 is set to be a landmark year for the automotive industry.
Also read: 80% of 2025 Festive Car Sales Driven by Compact Vehicles
Mass Market Appeal
During September and October, vehicles priced below Rs 10 lakh represented the largest share of sales, accounting for 78% of all transactions. The segment between Rs 5 lakh and Rs 10 lakh led the charge, while the sub-Rs 5 lakh category also contributed significantly.
GST Restructuring Impact
The recent changes in GST rates have played a crucial role in this surge. With taxes lowered for compact SUVs and small cars, prices dropped enough to draw buyers back to dealerships. This led to an impressive 50% increase in bookings for models now classified under the revised 18% GST band.
Retail Momentum and Consumer Excitement
This tax adjustment sparked a noticeable increase in retail activity. Dealerships experienced a frantic pace during Navratri and Diwali, with reports of cars leaving showrooms faster than paperwork could be completed. The Society of Indian Automobile Manufacturers (SIAM) noted a significant spike in sales during this festive period.
Record-Breaking Numbers
Sales of sub-4-metre cars and SUVs increased dramatically, rising from approximately 1.7 lakh units in September to over 2.2 lakh units in October, exceeding last year’s festive sales figures. Demand for these vehicles remained strong in both urban and rural markets.
Maruti Suzuki Leads the Charge
Maruti Suzuki has emerged as a leader in this trend, revealing that half of its five lakh festive bookings were for its small car lineup. Following the GST reduction, the contribution of these models rose from 16.7% to 20.5%, with demand for entry-level and compact vehicles increasing by more than 35%.
Growth in Higher Segments
While compact cars flourished, the premium segment also showed notable growth. Vehicles priced between Rs 15 lakh and Rs 20 lakh saw a 26% year-on-year increase, while models above Rs 20 lakh experienced over 40% growth. This indicates a surprising expansion in the aspirational premium market, despite ongoing economic uncertainties.
Steady Gains Across the Board
Cars priced between Rs 5 lakh and Rs 20 lakh, the backbone of India’s automotive sector, recorded consistent annual gains of 15% to 20%. This stability further emphasizes the resilience of the compact vehicle market.
Conclusion
The 2025 festive season has highlighted the importance of compact vehicles in India’s automotive landscape. With favorable tax adjustments and evolving consumer preferences, the compact car segment is poised for continued growth.
Disclaimer: This article is a rewritten summary from reliable sources. Please do your own research before making financial or purchase decisions.
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Related: 80% of 2025 Festive Car Sales Driven by Compact Vehicles
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FAQs
What percentage of festive car sales are compact vehicles?
Compact vehicles account for nearly 80% of festive car sales.
How did the GST restructuring impact car sales?
The GST restructuring led to a significant increase in bookings, particularly for small cars and compact SUVs.
Which brand benefited the most from the festive sales surge?
Maruti Suzuki saw the highest benefit, with half of its festive bookings for small cars.