Industry leaders express confidence in festive season recovery while seeking government intervention for dealer inventory compensation issues worth ₹2,500 crore.
14 Sep 2025 | 3156 Views | By Autocar Professional Bureau
New Delhi served as the nexus of the Indian automotive industry this week, bringing together top executives from automakers, component manufacturers, vehicle dealers and policy makers.
The annual conventions of the Society of Indian Automobile Manufacturers and the Automotive Component Manufacturers Association of India, along with the Federation of ...
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New Delhi served as the nexus of the Indian automotive industry this week, bringing together top executives from automakers, component manufacturers, vehicle dealers and policy makers.
The annual conventions of the Society of Indian Automobile Manufacturers and the Automotive Component Manufacturers Association of India, along with the Federation of Automobile Dealers Associations' Auto Retail Conclave, provided a key platform for dialogue and strategic planning.
The conventions were a mix of celebration and concern. While the industry leaders applauded the government's recent tax cuts and anticipated a surge in festive season sales, a major issue loomed: a potential ₹2,500 crore loss for dealers due to compensation cess already paid on existing inventory. Industry associations, including SIAM and FADA, have appealed to the Finance Ministry for a swift resolution.
In their addresses, key policymakers - including Union Ministers Nitin Gadkari, Piyush Goyal, and HD Kumaraswamy -highlighted the need for the industry to strengthen and diversify its supply chain, boost R&D investments, and integrate more deeply into global value chains amid the recent geopolitical situations.
In a separate development for sustainable mobility, JBM Ecolife Mobility secured a $100 million long-term capital investment from the International Finance Corporation.
Here is the detailed round-up of all major developments this week:
Maruti Sees GST Cut Driving Industry Growth Rate to 7%, Small Cars Growing at 10%
Senior executives at Maruti Suzuki anticipate that GST 2.0 will serve as a catalyst, helping the industry return to its previous growth trajectory of around 7% CAGR by next year. The small car segment is expected to lead this recovery, potentially growing at a faster rate of 10%.
CV Segment Biggest Beneficiary From GST Cut: Ashok Leyland's Shenu Agarwal
According to Ashok Leyland's Managing Director, Shenu Agarwal, the CV industry is poised to be the primary beneficiary of the government's recent tax reform, which slashed the GST on CVs from 28% to 18%. This could trigger the much-needed replacement of India's aging truck and bus fleet, and if this replacement demand accelerates, the CV market could surpass its 2019 peak this year.
GST 2.0 Can Spark ‘Festive Mayhem’, Says Hyundai’s Tarun Garg
Hyundai Motor India's COO, Tarun Garg, believes the government's GST 2.0 tax reform will lead to one of the strongest festive seasons for the automotive industry in recent memory. He anticipates that the coming months will see a massive surge in car sales, which he describes as a "mayhem" following the significant reduction in taxes on vehicles.
Gadkari Dismisses E20 Fuel Controversy as "Political Campaign" at SIAM Convention
Union Minister for Road Transport and Highways Nitin Gadkari denied concerns about the implementation of E20 fuel, a 20% ethanol-blended petrol. He dismissed the allegations as a "political campaign" personally targeting him, stating there was "no truth" to the criticisms circulating on social media.
Gadkari says EV Transition a Long-Term Journey, Sets 5-Year Target to Make India World’s No. 1 Auto Industry
Union Minister for Road Transport and Highways, Nitin Gadkari, has emphasized that India's transition to electric mobility will be a gradual, long-term process, rather than an overnight shift. He also set an ambitious goal for the country's automotive sector, aiming for it to become the world's largest within the next five years.
Component Industry Seeks Closer Govt Ties For Raw Materials, Access to New Markets
At a time when the geopolitical situation is challenging the global supply chain, the Automotive Component Manufacturers Association of India is pushing for stronger government partnerships to secure a robust supply of critical raw materials and gain access to new markets.
Government Highlights Need for Companies to Step Up R&D Play
Prime Minister's Office (PMO) Advisor Tarun Kapoor has urged the Indian automotive industry to increase its investment in research and development. He called on the industry to take a leadership role in innovation as the country works to become the world's largest automobile market and transitions toward sustainable mobility.
Govt Working on Scheme to Strengthen India's Role in Global Value Chain
To strengthen the Indian component sector's role in the global market, the government is developing a new scheme that will offer targeted financial support for both capital and operational expenses to help the industry better integrate into global value chains
India’s Auto Dealers Warn of ‘Big Pain’ from Inventory Glut
As the festive season begins, vehicle dealers are looking to balance the anticipated strong growth with operational challenges. Unlike previous years, when dealers confidently stocked up, this year's high inventories and significant tax cut are forcing a more cautious approach to stocking strategies. The GST Council’s announcement on the removal of compensation cess could result in Rs 2,500 crore hit for dealers.
SIAM Seeks Govt Help to Save Auto Dealers from Rs 2500 Cr GST Compensation
The Society of Indian Automobile Manufacturers (SIAM) has urged the government to provide a resolution to help vehicle dealers, who are facing a ₹2,500 crore loss from compensation cess paid on their festive season passenger vehicle inventory. This action is crucial to ensure the financial viability of dealers.
Mahindra Steps In to Cushion Its Dealers From Cess Pain, Waits for Govt Clarity
Mahindra & Mahindra’s CEO for Automotive Division and Executive Director of Mahindra Electric Automobile Ltd, Nalinikanth Gollagunta, said the issue of ₹2,500 crore cess burden on festive inventory needs government intervention. The company has rolled out a GST-equivalent scheme and slowed billing towards the end of August to give dealers breathing room.
Automakers Push Better Forecasting, Digitisation to Tackle Inventory Challenges
The automotive industry is approaching the festive season with a mix of optimism and caution. The GST Council decision to cut taxes on small cars and two-wheelers from 28% to 18% is expected to boost demand. However, dealers are concerned about a potential ₹2,500-crore loss from cess already paid on unsold inventory. During the FADA’s Auto Retail Conclave, automakers emphasized that using digital tools and sharper inventory forecasting will be crucial for managing supply and demand.
Harshavardhan Chitale to become Hero MotoCorp CEO from Jan 5
Hero MotoCorp has named Harshavardhan Chitale, who heads Dutch lighting maker Signify's professional business, as its new CEO. Chitale, who will assume his new role on January 5, 2026, will replace Vikram Kasbekar. Kasbekar is the acting CEO of Hero MotoCorp after Niranjan Gupta resigned earlier this year.
JBM Ecolife Mobility Secures $100 Million Investment from IFC
JBM Ecolife Mobility has secured a $100 million (₹835 crore) investment from the International Finance Corporation. This funding will be used to scale up the deployment of electric buses across India. JBM will use this to deploy 1,455 electric buses across Maharashtra, Assam and Gujarat.
MAHLE Sees India–EU FTA as Growth Catalyst, Eyes €1 bln sales India
An India–EU FTA could significantly boost growth for German automotive supplier MAHLE as the company sees India as both a rapidly expanding market and a key global export hub. With current Indian revenues of just over €400 million, the group aims to increase this to €700–800 million in the next five to seven years.
Suzuki maps 10-year powertrain strategy with ICE, hybrids and EVs
Mercedes-Benz Rolls Out Biggest Product Offensive, Balances EV and ICE Bets
India's Tractor Market Grows 28% Y-o-Y in August; GST Cut Likely to Spur Festive Sales
India's domestic tractor market saw a robust 28% year-on-year growth in August 2025, fueled by positive rural sentiment and a good monsoon. While sales were flat compared to July 2025, momentum is expected to increase in the coming months due to the festive season and a new GST cut to 5%.
ZF India to Quadruple Sourcing to ₹25,000 Crore, Eyes 2,000+ Suppliers
ZF India’s plans to quadruple the value of components procured from local suppliers to ₹25,000 crore highlight the German auto component giant's growing dependence on India as a crucial global hub for both internal combustion engine (ICE) and electric vehicle (EV) technologies.
India’s Regulations Put Us on Par with the World - Shailesh Chandra
In this exclusive conversation, Shailesh Chandra, President of SIAM and MD of Tata Motors Passenger Vehicles and Electric Vehicles, shares his views on India’s automotive growth story, global aspirations, and the EV revolution.
GST 2.0 a Gamechanger, Small Diesel to Gain - Toyota’s Vikram Gulati
In this insightful conversation, Vikram Gulati, Country Head of Toyota Kirloskar Motor, discusses how the latest GST reform marks a structural positive shift for the auto industry, strengthening growth prospects beyond initial projections and putting more money in people’s hands.
Compact SUVs to Drive Growth, EVs Set for Next Phase - Hyundai’s Tarun Garg
Tarun Garg, COO at Hyundai Motor India, breaks down the key trends shaping the auto industry. He explains how the typical industry cycle works, noting a 2% dip between April and August but projecting a strong 5% recovery from September onwards.