GST reduction propel vehicle sales; EV’s lead growth in Kerala: FADA
C.S. Vigneshwar, President-FADA
| Photo Credit:
DEBASISH BHADURI
Vehicle sales across the country have surged to new heights, with the industry witnessing record-breaking figures in October following a GST reduction from 28 to 18 per cent, said C.S Vigneshwar, President of the Federation of Automobile Dealers Associations (FADA).
A total of 91,953 units were sold in October alone, marking an overall sales growth of 40.5 per cent. The surge was driven mainly by the two-wheeler segment, which achieved a growth of 51.76 per cent, while passenger vehicles also saw a healthy growth of 11.35 per cent, he said
However, he pointed out that the luxury vehicle segment did not experience a similar surge, despite the GST reduction from 50 to 40 per cent, as sales had previously fallen in September due to anticipated cuts.
Vigneshwar was in Kochi for the Vyapar Kerala summit organised by FADA. A distinct feature of the recovery is that sales have increased more in rural areas than in cities, he said.
Manoj Kurup, President of FADA Kerala said that in Kerala, the GST reduction has directly galvanized the market for EVs. While the total sale of all vehicles reached 12,11,046 units between April 2021 and July 2024, the sale of E-vehicles during the same period was 6,431. Commercial EV sales registered a massive growth of 199.01 per cent, with electric cars also seeing a robust increase of 88.21 per cent. EVs have become a massive favourite in the commercial vehicle segment, further underlining the market’s favourable response to the tax policy changes, he said
The benefits are projected to cascade across the ecosystem. The exemption will extend to used-car sales, workshops and spare parts sectors, significantly boosting job opportunities. The reduced tax burden is fuelling key consumer trends: Two-wheeler sales are increasing, two-wheeler owners are upgrading to cars, and small car owners are purchasing larger vehicles, leading to families buying more than one car, he added.
Published on December 3, 2025
