Festive Auto Boom: 41% of Indians Ready to Buy Vehicles as GST 2.0 Spurs Demand

As India approaches Deepawali, the nation’s passenger vehicle (PV) market is poised for a festive-season surge, driven by renewed consumer confidence and policy reforms. According to a survey by Grant Thornton Bharat titled ‘Festive Drive: What Consumers Want in Their Next Ride’, 41% of over 2,800 respondents across age groups and cities are planning to purchase a vehicle in the next three to four months.

The study highlights that evolving lifestyles, increasing adoption of technology, and reforms such as GST 2.0 are shaping the mindset of aspirational, digitally savvy car buyers. Notably, 72% of respondents had postponed their purchase in anticipation of GST rationalisation, indicating the positive impact of simplified taxation and improved affordability.

Saket Mehra, Partner and Automotive Industry Leader at Grant Thornton Bharat, noted, “This festive season is more than just a sales period; it reflects deeper shifts in consumer behaviour. Rising interest in hybrids, greater safety awareness, and willingness to pay for premium features point to an informed, aspirational buyer. GST reforms and digital engagement offer OEMs an opportunity to reimagine their value proposition for India’s next phase of mobility.”

Key insights from the survey include:

Hybrid preference on the rise: 38% of respondents prefer hybrid vehicles, surpassing petrol (30%) and electric vehicles (21%), signaling a shift towards fuel-efficient transitional technologies.

SUV dominance: SUVs remain the segment of choice, with 64% of buyers preferring them. SUVs contributed 65% of total PV sales in FY25, up from roughly 50% two years ago.

Safety matters: 34% of respondents ranked safety above price and mileage, reflecting growing consumer awareness and regulatory influence.

Premiumisation trend: Over 35% of buyers are willing to pay extra for high-end variants, with 65% accepting a 10–15% price premium for feature-rich models.

Digital-first discovery: 52% of consumers combine online and offline channels before purchase, with social media (35%) and car apps (23%) leading the discovery process.

GST-driven affordability: Reduction of GST on small cars from 28% to 18% could lower acquisition costs by up to Rs 1 lakh, particularly boosting demand in Tier 2 and Tier 3 cities.

Also Read: India’s Auto Dispatches Hit Record High In September Despite GST Shift; Festive Tailwinds Brighten Outlook | Republic World


The survey also highlighted a 34% growth in PV retail during Navratri 2025, propelled by affordability, new launches, and upgrade buying. Rising disposable incomes, stable interest rates, and government reforms—including EV incentives and simplified taxation—are further supporting demand across urban and semi-urban markets.

With evolving consumer expectations, policy reforms enhancing affordability, and rising digital engagement, India’s automotive market is set for one of its most promising festive seasons in recent years. OEMs and dealers are encouraged to capitalise on these trends through feature-rich models, attractive financing options, and innovative digital experiences to capture India’s next-generation auto buyer.