Auto industry poised for strong Q3 as GST cuts lift sentiment: SIAM president Shailesh Chandra

The auto industry is set for a strong third quarter as consumer sentiment revives and the benefits of GST 2.0 reforms begin to play out, according to Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM).

Chandra said the industry has acted responsibly in swiftly passing on the GST rate reductions to consumers, complemented by additional festive discounts. “The industry has been very responsible in passing the full GST benefit to the consumers, and further sweetening it with some of the festive offers. We saw a significant spurt in September, which could not be fully serviced because there were only eight days of the month post-GST cut,” he told Business Today.

He added that the second-quarter numbers do not fully reflect the underlying momentum. “Quarter two does not give you the full reflection of what could be. If we had the full month of September under the new GST rates, performance would have been even stronger. Therefore, I believe quarter three should be better, as there is pent-up demand and strong consumer sentiment,” Chandra said.

Chandra attributed the supply gap to temporary logistics constraints which, he said, delayed deliveries but did not erode demand. “The prices of cars have been reduced, so there will be more customers in the market to buy. The demand will not be lost — it will be carried forward as pent-up demand,” he noted.

On the two-wheeler segment, Chandra highlighted that urban demand has already been robust, driven by higher-end motorcycles and scooters, and that rural markets are likely to pick up in the coming months. “Urban demand has been strong — greater than 350cc bikes and scooters have been doing well. With good monsoons, the upcoming marriage season, and rising rural activity, rural markets will now become the second engine of growth. I think two-wheelers should grow very strong,” he said.

On commercial vehicles, the SIAM President pointed to a mix of infrastructure push, a low base effect post-elections last year, and improving economic activity. “It is festive, of course, but definitely the infra activity has increased. The commercial vehicle segment will also see the positive impact of GST change kicking in gradually. I think the CV industry should also be good,” he added.

Industry data released by SIAM earlier showed that while passenger vehicle sales dipped 1.5% in Q2 FY26, two-wheelers and commercial vehicles grew 7.4% and 8.3%, respectively. With the festive and wedding season underway and consumer sentiment improving, the industry expects a stronger second half to the fiscal.