We hosted one of FADA’s former presidents and dealer-owner for M&M Auto and HMCL (Rajasthan), to discuss the current demand trends following the GST-led spike during the festive season. The expert highlighted the strong demand environment for PVs and 2Ws, with Nov-25 retails trending ahead of expectations despite a heavy festive base last year in November (Diwali and Dhanteras in November last year). Even with this high base, the expert expects Nov-25 sales to beat those seen in Nov-24 by ~10%, led by stronger traction in entry-level products (eg small cars in MSIL, commuter/entry motorcycles in HMCL, and entry models like Bolero and 3-door Thar for M&M) owing to better price elasticity post-GST cut in this segment. The dealer stated that the strong demand spillover into Nov-25 was a surprise, and expects it to sustain till mid-Dec owing to multiple marriage days ahead (~19 mahurat days in Nov-25 itself, per the Hindu Calendar). The dealer also highlighted that most OEMs are likely to take a price hike in Jan-26, driven by upcoming CAFE compliance costs. However, he believes there is a 6-7-month visibility for the current upcycle, driven by the GST-led affordability reset, marriage season (Nov–Dec and early CY26), and a meaningful rural demand lift expected from March, as harvest cash-flows pick up. Combined, these should keep retail demand firm till H1FY27 at least, even if MoM volumes normalize. We believe the expert’s view of a longer demand runway sustaining (vs what we have currently baked in) is likely to result in an upside potential for our volume estimates.

Strong festive bounce supports demand momentum
The dealer highlighted that the festive period delivered strong growth across segments, with entry-level demand particularly buoyant following the GST cut. Despite a ~3-week pre-festive lull, retails have surged sharply, with major beneficiaries including MSIL in PVs and HMCL in 2Ws. Even with last year’s Diwali base sitting in November, the dealer expects Nov-25 industry retails to beat those of Nov-24 by ~10%, led by stronger traction in entry-level models, eg small cars in MSIL, entry/commuter motorcycles in HMCL, and sustained momentum in M&M’s entry models (Bolero) and 3-door Thar. The GST-led ~10% effective price rollback is being viewed as the biggest sentiment driver in decades, making both—cars and entry commuter 2Ws—significantly more reachable to consumers. Rural demand is expected to firm up further in Mar–Jun, aided by harvest inflows.