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GST 2.0 Fuels Auto Boom: 41% Indians Plan Vehicle Purchase Amid Festive Rush

Indian consumers are showing renewed optimism this festive season with 41% planning vehicle purchases in the coming months. The GST 2.0 reforms have significantly influenced buying decisions, as 72% of consumers deliberately delayed purchases anticipating tax benefits. Consumer preferences are shifting dramatically toward hybrid vehicles and SUVs, while safety features are becoming a key purchase consideration. This reflects a maturing automotive market where digital channels and premium features are driving the next phase of mobility in India.

Key Points: GST 2.0 Drives 41% Indian Consumers to Buy Vehicles Soon

  • 72% of consumers deferred vehicle purchases awaiting GST rationalization
  • Hybrid vehicles preferred by 38%, outpacing petrol cars and electric vehicles
  • SUV segment dominates with 64% consumer preference in passenger vehicle market
  • 34% of buyers now prioritize safety features over price and mileage considerations
2 min read

GST 2.0 booster: 41 pc Indian consumers planning to buy vehicle in next 3-4 months

41% of Indian consumers plan vehicle purchases in 3-4 months, with 72% having deferred for GST rationalization. Hybrid vehicles surge past petrol and EVs in consumer preference.

"This festive season signals deeper shifts in consumer behavior - Saket Mehra, Grant Thornton Bharat"

New Delhi, Oct 16

Evolving lifestyles, technology adoption and policy reforms such as GST 2.0 are driving renewed optimism for Indian consumers this festive season, with 41 per cent of consumers planning to purchase a vehicle in the next three–four months, a report showed on Thursday.

Notably, 72 per cent of them deferred their purchase in anticipation of GST rationalisation, signalling the impact of simplified taxation and improved affordability on consumer sentiment.

According to a Grant Thornton Bharat report, the preference for hybrid vehicles is rising among consumers, with 38 per cent of them opting for hybrid cars, outpacing petrol (30 per cent) and EVs (21 per cent), signalling a clear shift in consumer preference towards transitional, fuel-efficient technologies.

The craze for sports utility vehicles (SUVs) remains high, with 64 per cent of consumers preferring SUVs. This segment has held the top spot in India’s passenger vehicle (PV) market, contributing 65 per cent to total sales in FY25, up from almost 50 per cent just two years ago.

Meanwhile, the report highlighted a shift toward safety metrics as well, with 34 per cent of buyers saying that they are prioritising safety over price and mileage.

This reflects a maturing market influenced by stricter regulations, crash test awareness and tech-enabled safety features.

“This festive season is not just a sales window; it signals deeper shifts in consumer behaviour. The growing preference for hybrids, rising safety consciousness, and willingness to pay for premium features reflect a more informed and aspirational buyer," said Saket Mehra, Partner and Automotive Industry Leader, Grant Thornton Bharat.

With GST reforms unlocking affordability and digital channels reshaping discovery, OEMs have a unique opportunity to reimagine their value proposition for India’s next phase of mobility, Mehra added.

According to the report, more than 35 per cent of buyers are willing to pay more for high-end variants, and 65 per cent have mentioned a 10–15 per cent price premium is acceptable, highlighting rising aspirations and demand for feature-rich vehicles.

Additionally, 52 per cent of consumers use both online and offline channels before buying, with social media (selected by 35 per cent of respondents) and car apps (selected by 23 per cent of respondents) leading the discovery phase.

"The reduction of GST on small cars from 28 per cent to 18 per cent could lower acquisition costs by up to Rs 1 lakh, particularly boosting demand in Tier 2 and Tier 3 cities," the report noted.

- IANS

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Reader Comments

P
Priya S
Interesting to see hybrid vehicles leading the preference. As someone living in Bangalore with frequent power cuts, hybrids make more sense than full EVs. Smart choice by Indian consumers!
A
Arjun K
While the GST cut is welcome, I hope the government ensures that car manufacturers actually pass on the full benefit to consumers. Last time, many companies only gave partial benefits.
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Sarah B
The safety focus is a positive development. Indian roads need safer vehicles. Glad to see consumers prioritizing safety over just price and mileage. This is real progress for our country.
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Vikram M
SUV craze continues! But with rising fuel prices, I hope people consider the running costs too. Hybrid SUVs might be the perfect balance for Indian conditions.
M
Michael C
The digital shift in car buying is fascinating. Used car websites and YouTube reviews have completely changed how we research vehicles. Much more transparent process now.

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