GST relief fuels India’s car upgrade wave, EV optimism, says study

Mumbai: While GST reductions on cars fueled a rebound in sales in the festive season, around 80 per cent of buyers surveyed used the tax relief to switch to a higher model, better brand, or premium add-ons, rather than saving the difference, a study has found. The study by consumer-intelligence and market-research platform SmyttenPulse AI stated that SUVs remain the popular choice for buyers, while environmental consciousness is driving a sharp rise in EV consideration despite infrastructure gaps.

The ‘Post GST Car Buying Behaviour trends’ study was conducted among more than 5,000 people in October 2025 across Tier 1, 2 and 3 cities.

“GST cuts have acted as a catalyst, but the larger story is behavioural: buyers are upgrading, not downsizing. Nearly 79 per cent of respondents said they are using GST savings to switch to a higher model, better brand, or premium add-ons, rather than saving the difference,” the study noted.

Over 60 per cent plan to upgrade to higher variants within the same brand and 46 per cent have already moved up to a larger vehicle category, from hatchbacks to SUVs, it said.