India’s automobile sector witnessed a robust rebound in September 2025, signaling a strong start to the second half of FY2026. According to the latest analysis by ICRA, the industry recorded a 5–10% increase in overall sales across segments, with the commercial vehicle (CV) category leading the charge with an impressive 11.9% year-on-year growth in wholesale volumes. This resurgence is attributed to the dual impact of Goods and Services Tax (GST) reforms and the onset of the festive season, which traditionally boosts consumer sentiment and spending.
The GST rationalization, which reduced the tax rate from 28% to 18% effective September 22, 2025, played a pivotal role in stimulating demand across vehicle categories. Infrastructure projects and revived logistics activity further supported the CV segment, while two-wheelers and passenger vehicles also posted notable gains.
📊 Segment-Wise Performance Snapshot – September 2025
| Vehicle Segment | YoY Growth (%) | Key Drivers |
|---|---|---|
| Commercial Vehicles | 11.9% | GST cut, logistics revival, infra push |
| Two-Wheelers | 6.5% | Festive demand, rural recovery |
| Passenger Vehicles | 5.8% | New launches, urban mobility demand |
| Tractors | 3.1% | Kharif harvest optimism, subsidy support |
| Electric Vehicles | 9.4% | FAME incentives, urban adoption |
The CV segment’s growth was especially pronounced in the Medium and Heavy Commercial Vehicle (M&HCV) category, despite temporary retail contraction due to deferred fleet purchases.
🧠 Factors Driving the September Recovery
| Factor | Impact on Auto Sector |
|---|---|
| GST Reform | Lowered vehicle prices, boosted affordability |
| Festive Season | Increased footfall, higher retail conversions |
| Infrastructure Projects | Demand for CVs and construction equipment |
| Rural Sentiment | Two-wheeler and tractor sales improvement |
| EV Push | Urban adoption and fleet electrification |
The combination of policy reform and seasonal demand created a favorable environment for manufacturers and dealers.
🏢 Top Performing OEMs in CV Segment – September 2025
| Manufacturer | YoY CV Sales Growth | Notable Models |
|---|---|---|
| Tata Motors | 13.2% | Prima, Intra, Ace |
| Ashok Leyland | 11.7% | Boss, Dost, AVTR |
| Mahindra & Mahindra | 10.9% | Blazo, Furio |
| VE Commercial Vehicles | 9.8% | Eicher Pro Series |
| BharatBenz | 8.4% | 2823C, 1217R |
These OEMs capitalized on fleet replacement cycles and infrastructure-linked demand.
📈 Retail vs Wholesale Trends
| Metric | CV Segment | Two-Wheelers | Passenger Vehicles |
|---|---|---|---|
| Wholesale Growth | 11.9% | 6.5% | 5.8% |
| Retail Growth | 3.2% | 6.1% | 4.9% |
| Inventory Levels | Moderate | Low | Stable |
| Dealer Sentiment | Positive | Cautiously optimistic | Strong |
Retail sales lagged slightly behind wholesale figures due to cautious buying behavior and inventory adjustments.
🧭 Outlook for FY2026
ICRA forecasts a 3–5% growth in CV sales and 6–9% growth in two-wheeler volumes for the remainder of FY2026. The outlook remains positive, contingent on continued policy support, rural demand stability, and macroeconomic resilience.
| Segment | FY2026 Forecast Range | Key Assumptions |
|---|---|---|
| Commercial Vehicles | 3–5% | Infra push, GST stability |
| Two-Wheelers | 6–9% | Rural recovery, festive momentum |
| Passenger Vehicles | 5–7% | Urban demand, new launches |
| Electric Vehicles | 10–12% | Incentives, charging infra expansion |
The industry is expected to maintain momentum through Q3 and Q4, with Diwali sales acting as a key inflection point.
📌 Conclusion
India’s auto sector has entered a phase of recovery and optimism, with September 2025 marking a turning point driven by policy reform and seasonal demand. The 11.9% YoY growth in commercial vehicle sales underscores the sector’s resilience and its critical role in economic revival. As manufacturers ramp up production and dealers prepare for festive peaks, the industry looks poised for sustained growth in the coming quarters.
Disclaimer: This article is based on publicly available industry reports and market data. It is intended for informational purposes only and does not constitute financial or investment advice.
