With GST 2.0 coming into effect on September 22, 2025, major automakers in India have already adjusted their pricing, giving consumers a significant reduction on cars and bikes. Brands like Tata, Mahindra, Maruti, and Toyota have announced price cuts, with some models becoming cheaper by as much as ₹1.5 lakh. But will prices drop further? Let’s break it down.

Immediate Price Cuts After GST 2.0

The new GST regime has lowered tax rates across the auto sector:

• Most vehicles: GST reduced from 28% to 18%

• SUVs longer than 4 meters: GST reduced from 43% to 40%

As a result, car prices have already seen substantial reductions:

• Tata Motors & Mahindra: Up to ₹1.5 lakh cheaper

• Maruti cars: Up to ₹1.2 lakh cheaper

• Toyota Fortuner: Up to ₹3.49 lakh cheaper

Consumers are seeing the benefits immediately, making vehicles more affordable.

Auto Sector Growth Outlook

According to Motilal Oswal, the outlook for the auto sector is improving significantly:

• Two-wheelers: Sales projected to grow 4% in FY26 and 7.5% in FY27

• Passenger vehicles: Growth expected at 3% in FY26 and 8% in FY27

• Commercial vehicles: Growth expected at 5% in FY26 and 7% in FY27

• Tractors: Growth forecasted at 10% in FY26 and 6% in FY27

Shift Toward Premium Vehicles

The report highlights a growing consumer preference for premium vehicles with advanced features and greater comfort. Smaller and budget-segment vehicles may see gradual demand recovery, but the overall trend favors higher-end models.

Why Further Discounts May Not Be Likely

As demand increases, automakers are expected to reduce additional discounts to protect profit margins. While festive season offers have been common in the past, the report suggests that with already lower prices due to GST 2.0, consumers may not see significant extra discounts this year.

Key Takeaways for Customers

• Immediate benefits: Significant price cuts are already in effect due to GST 2.0

• Festive discounts: Likely to be limited because demand is picking up

• Premium models: More attractive to buyers, as they offer advanced features

• Budget vehicles: May see small price adjustments but less impact

In summary, the GST cut is a game-changer for the auto sector, making vehicles more affordable immediately. However, waiting for extra festive discounts may not yield substantial savings this year, as automakers focus on maintaining margins amid rising demand.