Mercedes-Benz India has reported a record-breaking sales surge during the Navratri festival, moving one car every six minutes and selling over 2,500 units in just nine days—nearly half of its strong Q3 total of 5,119 cars. The average price per vehicle was an impressive ₹1 crore, signaling robust demand for high-end luxury models in a market that had previously seen subdued sentiment due to repeated price hikes and GST-induced sticker shock.
CEO Santosh Iyer during the conversation with highlighted that the “huge rally in demand” began immediately after the GST 2.0 auto rate corrections took effect on September 22, with the brand selling 270 cars every day—an unprecedented run for the company.
This meteoric rise snapped Mercedes-Benz out of a flat year-to-year comparison (Q3 2024 sales were 5,117 units), and exemplifies how government policy, when coupled with festive optimism, can reignite the luxury car market. The automaker attributes its turnaround not only to GST cuts but also to pent-up demand from buyers delaying purchases in hope of better deals, aggressive model launches, and special festive offers across showrooms nationwide. Analysts have described it as the “best-ever festive period on record” for Mercedes in India.
GST Rate Cuts: The Game Changer for Car Buyers
The 56th GST Council’s “GST 2.0” reforms, which came into effect on September 22, 2025, have significantly changed the math for car buyers. Earlier, luxury cars attracted a 28% GST plus a compensation cess of up to 22%, translating to an effective tax rate of as much as 50%. The new system replaces this with a flat 40% GST and eliminates the compensation cess for large cars and SUVs. For many high-end Mercedes and BMW models, this has resulted in sizable on-road price drops—up to ₹25 lakh on flagship models like the Mercedes-AMG G 63 and ₹8–10 lakh on SUVs such as the BMW X7 and Mercedes GLS.
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Mid-range and entry-level cars, as well as two-wheelers (≤350cc), have also become cheaper, with GST dropping from 28% to 18%. As a result, not just luxury but a wide spectrum of buyers are enjoying more competitive prices, with all associated costs—like insurance and road tax, also linked to the lower ex-showroom value—seeing downward revisions.
Festive Surge: Navratri and September Sales Boom
The effect was immediate: dealer footfalls and bookings surged across India’s auto sector during Navratri, with overall retail sales jumping a record 34% year-on-year, led by both pent-up demand and price reductions.
- Mercedes-Benz: Sold over 2,500 cars in nine days—almost half its entire Q3 sales.
- Mahindra & Mahindra: Reported SUV retail growth over 60% during Navratri and total vehicle sales of 100,298 in September, up 16% YoY.
- Broader market: Two-wheelers (up 6.5%), passenger vehicles (up 5.8%), commercial vehicles (up 14.8%), and three-wheelers (up 24.5%) all saw robust growth.
Read this: Mahindra Cuts Car Prices by Up to ₹1.56 Lakh Even Before Govt’s GST Rollout — Here’s Why
Citroen, Audi, and BMW have also passed on GST benefits, cutting prices by ₹2 lakh to as much as ₹8.9 lakh on select models, further stoking demand in the luxury segment.
Industry Reactions and Outlook
Auto industry analysts and the Federation of Automobile Dealers Association (FADA) called this period a “historic high” and expect the momentum to continue through Dhanteras and Diwali, forecasting a record 42-day festive sales streak if supply chains keep pace.
Affordable pricing, easy financing, and dealer offers are drawing both first-time and upgrade buyers, transforming the sector’s prospects. The GST cuts have particularly revived premium, flagship model interest which had been dampened by previous price hikes and tax uncertainty.
In summary:
GST 2.0 reforms—slashing rates and streamlining auto taxation—have transformed the Indian car market ahead of the festive season. As reflected in Mercedes-Benz’s September sales rally and similar surges by other automakers, both luxury and mainstream car buyers are taking full advantage of a more accessible, vibrant market, ushering in what might be the strongest festive sales season in Indian auto history.
