Auto demand holding firm after festivals, retailers expect strong December

India’s auto sector is likely to see steady demand through the year-end, supported by strong post-festive buying and goods and services tax (GST)-driven affordability, according to Shailender Luthra, Director at Brite Group.Speaking to CNBC-TV18, Luthra said the latest VAHAN registration data shows that demand continues to hold up after the festive season.

Luthra said the market sentiment is positive and dealers are seeing a healthy order book. Registrations have risen after the festive period, and the demand is unlikely to soften.

The Federation of Automobile Dealers Associations (FADA) CEO Saharsh Damani echoes Luthra’s views that the demand strength is not only a festive effect. November has been supported by marriage-related buying, and December should see strong schemes from automakers as the calendar year ends. “Till December, demand is good,” he said, adding that continued schemes in early 2026 will be key to keeping growth stable.Also Read | UBS analyst says auto demand may cool after festive surge as GST impact fades
For the October–December period, Damani expects passenger vehicle growth to remain above the 4-4.5% run rate seen so far this year, supported by GST 2.0. Two-wheeler demand should grow in high single digits. For the full year, passenger vehicle growth is expected at 5-6% and for two-wheelers at 9-10%.On the debate around revised emission norms, Luthra said manufacturers will support the changes and customer sentiment should remain steady. India is a torch bearer on emission standards and both consumers and original equipment manufacturers (OEMs) are prepared for stricter norms.

While this may lead to higher re-registration costs for old vehicles and act as a deterrent, but he believes it will not significantly shift buying behaviour. Customers increasingly prefer replacing old vehicles rather than extending their life, and he appealed for more incentives for scrappage and recycling.

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Damani pointed out that EV penetration is currently 8-9% for two-wheelers and 5% for passenger vehicles and while growth has been slow in recent months, it is supported by more established manufacturers entering the segment. Over the next 6-9 months, he expects two-wheeler EV penetration to rise to around 15% and passenger vehicle EV penetration to reach 8–9%.

For the full interview, watch the accompanying video

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