Which Indian automakers are expected to benefit the most from the tax overhaul?

Jefferies' preferred picks are Mahindra & Mahindra and TVS Motor, followed by Maruti Suzuki and Eicher Motors. Nomura identifies M&M, Maruti, Ashok Leyland, and TVS as stocks with the biggest upside potential.

How are Indian consumers responding to the anticipated GST cut?

Indian auto buyers are delaying purchases ahead of the expected 10% GST rate cut in September, creating a peculiar market dynamic where demand softening today could trigger a festive season sales surge tomorrow.

Home / Business and Economy / Buyers Delay Purchases as India Mulls Major Auto Tax Overhaul

Buyers Delay Purchases as India Mulls Major Auto Tax Overhaul

Q: What is the potential impact of the GST cut on Indian auto demand?

The proposed GST reduction could have a multiplier effect of 1.0-1.5x on demand, implying a 5-10% potential increase in sales.

26 Aug

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Summary

Indian auto sales slowing as buyers wait for potential 10% GST cut
Jefferies expects 2Ws and small PVs to benefit most from tax changes
Demand softening now could trigger festive season sales surge

Buyers Delay Purchases as India Mulls Major Auto Tax Overhaul

As of August 26th, 2025, Indian auto sales are slowing as buyers delay purchases in anticipation of a potential 10% GST rate cut in September. The GST Council is scheduled to meet on September 3-4 to finalize the new tax structure, and consumers are holding off on fresh vehicle purchases, creating a peculiar market dynamic.

Jefferies, a global brokerage firm, expects two-wheelers and small passenger vehicles to emerge as the biggest beneficiaries of the tax rationalization. While the demand softening today could trigger a festive season sales explosion tomorrow, the proposed changes would see most auto segments, currently taxed at 28%, drop to 18%, with EVs and tractors potentially enjoying a mere 5% rate.

Nomura estimates the GST reduction could have a multiplier effect of 1.0-1.5x on demand, implying a 5-10% potential increase. Popular models like the WagonR, Bolero, Brezza, Creta, and XUV700 could see substantial price cuts ranging from 3% to 10%. Jefferies' preferred stock picks are Mahindra & Mahindra and TVS Motor, followed by Maruti Suzuki and Eicher Motors, while Nomura identifies M&M, Maruti, Ashok Leyland, and TVS as stocks with the biggest upside potential.

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