Tax cuts ignite festive sales, ad surge in auto, FMCG, appliances

New Delhi: India’s festive season has roared to life with record-breaking auto sales on the very first day of Navratri, after the government’s GST 2.0 reform slashed prices across cars, two-wheelers, appliances and FMCG staples. 

The surge in automobile numbers is significant, as the sector’s performance is often seen as a bellwether for overall consumer sentiment and a reliable indicator of advertising expenditure strength.

It is not just automakers. Retailers, FMCG players and consumer goods companies alike say the tax cuts have turbocharged demand and are set to make this one of the biggest festive advertising seasons in recent memory.

Carmakers reported unprecedented deliveries on September 22, the day the new two-slab GST structure of 5% and 18% came into force. Maruti Suzuki retailed over 30,000 cars, Hyundai clocked 11,000 units, its best single-day performance in five years, and Tata Motors delivered around 10,000 vehicles while handling more than 25,000 customer enquiries.

“We have already crossed 25,000 deliveries and expect to end the day at over 30,000 units. With reduced prices, bookings for small cars are up 50%, and some variants may even run out of stock,” said Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki.

Hyundai COO Tarun Garg described the day as “our highest single-day performance in the last five years,” crediting the momentum to GST cuts and festive offers.

Tata Motors’ MD Shailesh Chandra, who also heads SIAM, said dealerships are witnessing “unprecedented walk-ins, a surge in enquiries and record deliveries.” 

Federation of Automobile Dealers Associations (FADA) President C S Vigneshwar added that GST 2.0 would finally revive entry-level segments that had been under stress: “This rejig will kick-start small cars and two-wheelers, where affordability had been the biggest hurdle.”

Commercial vehicle makers also reported gains, with Ashok Leyland projecting a 25–30% increase in light commercial vehicle sales during the September–October festive window.

The surge sent auto stocks higher, with Maruti hitting a 52-week high and Ashok Leyland, MRF and Mahindra & Mahindra among the day’s gainers.

In FMCG, companies quickly cut prices across soaps, shampoos, biscuits, spices and other daily essentials. The sudden timing has forced a temporary break from the “magic price points” of Rs 2, Rs 5 and Rs 10 that dominate the sachet economy.

A Rs 5 Parle G pack now costs Rs 4.45, while shampoo sachets that were Rs 2 are priced at Rs 1.75. Companies say it will take 6–8 weeks to reprint packaging and adjust grammages, after which round price points will return.

“Right now, my wrappers for October and November are already printed, so we are passing the benefit through non-standard prices,” said Parle Products Vice President Mayank Shah.

Dabur CEO Mohit Malhotra said the company had adjusted prices across its portfolio to ensure affordability without compromising quality: “We’ve proactively reduced MRPs, including on low unit packs, so every consumer benefits from the tax cut.”

Analysts believe the disruption will be short-lived but sales-positive. “These are short-term measures. Ultimately companies will increase volumes and return to round price points with extra grammage. We remain positive on volume growth,” said Abneesh Roy of Nuvama Institutional Equities.

Consumer durables also saw an immediate lift. With GST on air-conditioners reduced from 28% to 18%, Haier India reported double sales compared to a typical Monday. Panasonic said its AC business posted record single-day sales of 7,000 units, with 50% growth offline.

In televisions, SPPL (licensee for Thomson and Kodak) reported a 30–35 per cent sales jump in 43-inch and 55-inch models, while Vijay Sales said deliveries nearly doubled despite it being a weekday.

Godrej Appliances and LG Electronics both reported higher footfalls and extended store hours, with LG noting that “early trends are definitely encouraging.”

Industry watchers say the sales boost will directly power festive advertising. Auto brands, buoyed by record bookings, are expected to raise budgets across television, print and digital to capture consumer momentum. 

FMCG companies will drive campaigns around affordability and value, especially in rural markets, while appliance makers and electronics brands will push promotions across video, digital and retail media.

With consumption rising simultaneously across mass and premium categories, media planners expect one of the strongest festive AdEx seasons in years. The ripple effect is expected to benefit television, print supplements, digital video, OOH and retail media in equal measure.

While the immediate gains are visible in store counters and stock tickers, industry leaders say GST 2.0 will sustain demand well beyond this festive quarter.

“This reform is not just for the week or month; it will benefit us for years,” said FADA’s Vigneshwar. SIAM’s Rajesh Menon added that the GST cut would “inject fresh momentum into the auto sector and strengthen India’s path towards becoming a developed economy.”