Name: India hits record car sales in October: Will the party continue?
Uploaded: 2025-11-07T15:20:50.830Z
Duration: 5 min 10 s
Description: Puneet Gupta, Director at S&P Global, says while the company has raised its 2026 India car sales outlook on the back of GST rate cuts which have made vehicles cheaper, the new emission norms that kick in at the end of next year will again lift prices.

Puneet Gupta, Director at S&P Global, says while the company has raised its 2026 India car sales outlook on the back of GST rate cuts which have made vehicles cheaper, the new emission norms that kick in at the end of next year will again lift prices.

Mumbai

India's automotive sector has achieved record car sales, attributed to GST cuts implemented during the festive season and increased affordability for consumers. Industry analysts have revised growth projections upward for 2026, citing low car penetration and strong demand, though they note that new CAFE 3 norms in 2027 may lead to price increases.

Manufacturing in India's auto sector is also benefiting from government policies, including new free trade agreements and production-linked incentive schemes. While currency weakness and global economic risks could pose challenges, the overall outlook for India's auto industry remains highly optimistic.

India hits record car sales in October: Will the party continue?

And a lot of it's also tied in the fact that there was that one to punch timing the GST reforms of the GST cuts around the festive season that really turbocharged the sales numbers as we see. My question though for me is is this sustainable or could this just be a one off that that that that sees a one off boost with regards to sales and then a reversion a quick reversion back to the mean. No. So yeah. So in essence you know we have revised our 2026 calendar year numbers and we are really looking as I said you know cars have become affordable and India you know penetration levels are really too less. So. So we are really looking for a good story you know for 2026. And you know clearly there is a lot of optimism in the country. And it is not just only the car price cuts because if you see because of GST you know the spending there is a saving element you know which have increased for every consumer. Right. So direct as well as indirect. So there is a positive impact on car sales. But now you know considering that you know in 2027 we have cafe three norms kicking in. So because of which you know we may see price increases increases you know towards the last maybe you know towards the end of 2026. But we have full year 2026 you know where we will see you know the auto industry really in full drive. And we have started seeing that you know from from last month itself. You know when we are seeing that the inquiries the demand is really outpacing you know the old benchmarks. Right. But let's. OK. So it seems that on the sales front there is a lot of upside with regards to a revival in Indian auto sales. But could this also translate towards Indian auto manufacturing. I ask that because manufacturing as a whole across the world has been put on notice because of a lot of the supply chain dislocations and some of the tariff concerns that have been unleashed in the last couple of months. Net net. What is the outlook now for Indian automotive manufacturing when you take into account the opportunities by this by by growing sales and also some of the supply chain issues that we've seen really come before over the last couple of months. Right. So today India is at a very interesting junction. You know on one side our auto industry is growing. And since you know India is signing a lot of FDA. So that's really going to help you know the supply sector also. You know so we may see and you know a lot of suppliers and basically Indian government has been pretty proactive in terms of offering BLI schemes. So I think all in all you know it's going to be a big boon because you know FDA means maybe more exports of parts from India. And then our domestic market itself is doing good. And you know if you see the PMI index of S&P Global I think India clearly in the last few months the PMI have touched around 65 which is the highest ever in last you know almost around two years. So so so clearly you know when PMI is above 60 it reflects that your manufacturing is booming. You know and auto industry itself is booming. And you know as India grows as India GDP per capita you know have crossed the inflection point of twenty five hundred dollars you know per capita. So so clearly you know this is the inflection point for any country. And as India grows as India economy grows the need to mobile mobility will increase. You know and that is how we see you know which is in conjunction that you know overall the auto industry is going to be the net beneficiary and GST cut coming at a perfect time is further going to be a big boon for the industry income in at least in coming year. I put it. What about currency weakness. Because whenever we look at consumer confidence and consumer appetites we also look sometimes at the strength of the state of the currency. And perhaps you've also been aware of the fact that the rupee has been flirting with some of the weakest levels on record. Is there a point where currency weakness might actually start to dent appetites for some of these discretionaries like autumn like autos. Yes. So you know obviously I think in last point also we were touching. So so there is no doubt that you know currency devaluation will dent the margins. But parallelly I think this will be outpaced by the growth. What we will be seeing in the industry and already Williams have a cushion of big GST cut you know which has happened and which is quite substantial you know which is almost 10 to 12 percent for car manufacturers. But then what makes us worry is obviously global crisis because you know domestically India looks very strong. You know but when when you come to next media crisis or when you come to you know the global economic or global political scenario then obviously you know that is something you know which needs to be washed out very carefully because today obviously India is a domestic market domestic market. But it is not isolated. You know it is very much connected to the world. Also so that can be you know that can impact the industry. But that comes as a risk factor later. But overall we see you know clearly you know India in full optimism today.

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