Auto dealers saw subdued sales during Ganesh Chaturthi, Onam

Consumers delayed purchases, anticipating a reduction in GST on vehicles.

Automobile dealers faced a subdued Ganesh Chaturthi and Onam as consumers delayed purchases, anticipating a reduction in Goods and Services Tax (GST) on vehicles. The removal of cess in the GST reforms is also expected to hit them with an estimated ₹2,500 crore loss, according to a dealers association.

Muted start to festival season

Dealers have pointed out that while enquiries online and footfall in showrooms increased after the announcement of a possible reduction in GST on small cars and motorcycles, however consumers delayed their purchases leading to low sales.

“There has been a significant decline in purchases this Ganesh Chaturthi as consumers delayed their purchases. The festival season starts with Raksha Bandhan, and we have witnessed a significant year-on-year decline. This has hit automobile dealers across the country with passenger vehicle inventories rising upto 90 days for some automobile brands,” Sachin Vasantrao Mahajan, Chairperson of the Federation of Automobile Dealers Association (FADA) Maharashtra, told businessline.

“Consumers have delayed their purchases as the festive season started. The sales in H1 this year were already subdued due to extreme weather conditions, and now the sales have been delayed in the festive period. We are hoping sales will pick up in the rest of the festive period,” said an automobile dealer based in Maharashtra.

 While FADA has pointed out that passenger vehicle inventories are between 50-55 days, dealers have stated that some automobile brands have an inventory close to double of that.

“It has been a subdued Ganesh Chaturthi and Onam, and if the same continues till September 22, it will not be good for automobile dealers and the industry. We are hoping that some interim relief will be reached for the dealers. The cess loss will severely impact the dealers, and it is unfair that we will have to bear the loss. We will be meeting key ministers in the coming week and are hopeful for a quick resolution,” CS Vigneshwar, President of FADA, told businessline.

Loss concern

The automobile dealers have raised concerns that they could face a loss of up to ₹2,500 crore in cess if the Centre does not intervene. FADA has stated that with dealers operating on minimal margin, the cess loss could wipe out profit for the complete year.

GST price benefit

Indian automakers Tata Motors and Mahindra & Mahindra have announced a reduction in vehicle prices from September 22 and September 6. Tata Motors announced a reduction in vehicle range from ₹65,000 to ₹1,55,000, while Mahindra & Mahindra announced a reduction between ₹1,01,000 and ₹1,45,000, depending on the vehicle models.

On Monday, the GST Council slashed GST rates on cars up to 4 metres in length and up to 1,200cc engine to 18 per cent from 28 per cent and also removed the cess, making vehicles cheaper.

Luxury carmaker BMW India also announced reduction in vehicle prices between ₹2,00,000 and ₹9,00,000.

Published on September 6, 2025

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