The Indian automotive industry is witnessing a transformative moment as major manufacturers Honda and Jeep announce substantial price cuts across their vehicle portfolios. These reductions, effective from September 22, 2025, directly result from the government’s landmark Goods and Services Tax (GST) reforms, marking the most comprehensive tax restructuring since GST implementation in 2017.
Honda Delivers Significant Savings Across Portfolio
Honda Cars India has announced price reductions of up to ₹95,500 on its passenger vehicles. The compact sedan Amaze receives the maximum benefit, with savings reaching ₹95,500 on the third-generation model. The popular City sedan becomes more affordable by ₹57,500, while the recently launched Elevate SUV sees a reduction of ₹58,400.
Honda Motorcycle & Scooter India has also joined the price-cutting initiative, offering benefits of up to ₹18,887 on motorcycles and scooters up to 350cc. Popular models like the Activa 110 will see savings of approximately ₹7,874, while the CB350 series leads with nearly ₹19,000 in reductions.
“The reduction in GST on two-wheelers and spare parts is a timely and forward-looking step, making vehicles more affordable and strengthening the overall ecosystem,” said Yogesh Mathur, Director of Sales and Marketing at Honda Motorcycle & Scooter India.
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Jeep Announces Dramatic Price Cuts on SUV Lineup
Jeep India has confirmed substantial price reductions across its entire portfolio, ranging from ₹1.26 lakh to nearly ₹4.8 lakh depending on the model and variant. The flagship Wrangler receives the maximum discount of ₹4.84 lakh, followed by the Grand Cherokee with savings of ₹4.50 lakh. The company’s more accessible models, the Compass and Meridian, will see reductions of up to ₹2.16 lakh and ₹2.47 lakh respectively.
Kumar Priyesh, Business Head and Director of Automotive Brands at Stellantis India, emphasized that “the GST reform is a transformative step that brings clarity and affordability for customers. We are delighted to pass on the full benefit to our buyers, making the Jeep lifestyle more accessible than ever”.
Understanding GST 2.0: The Reform That Changes Everything
The GST Council’s September 2025 decision represents a fundamental shift in India’s tax structure. Small cars with petrol engines up to 1200cc and diesel engines up to 1500cc, both not exceeding 4 meters in length, now attract 18% GST instead of the previous 28%. Larger vehicles face a flat 40% GST rate compared to the earlier effective rate of 45-50% that included compensation cess.
This rationalization affects more than just passenger vehicles. Most auto components now carry an 18% tax rate, down from higher brackets, while luxury vehicles have been placed in a 40% slab to maintain revenue balance.
Industry-Wide Response and Market Impact
The automotive sector’s response to GST 2.0 has been overwhelmingly positive. Major manufacturers including Tata Motors, Mahindra, Hyundai, Toyota, Kia, and even luxury brands like Mercedes-Benz, BMW, and Jaguar Land Rover have announced similar price reductions.
According to the Society of Indian Automobile Manufacturers (SIAM), the reforms will particularly benefit first-time buyers and middle-income families by improving access to personal mobility. SIAM President Shailesh Chandra noted that the industry recorded “highest-ever sales of 4.3 million units” in passenger vehicles last fiscal year, with a 2% growth over the previous year.
Honda and Jeep Perfect Timing for Festive Season Sales
The implementation date of September 22, 2025, strategically positions these price cuts just ahead of India’s crucial festive season. Industry experts anticipate a significant boost in consumer sentiment and vehicle sales during Navratri and Diwali periods.
Hyundai Motor India Managing Director Unsoo Kim described the GST reforms as expected to “lift consumer sentiment during the festive season and support long-term expansion”. The timing allows manufacturers to capitalize on traditional peak buying periods while offering genuine value to customers.
Economic and Long-Term Implications
Beyond immediate price benefits, the GST 2.0 reforms are expected to generate broader economic impacts. The changes align with government initiatives such as Make in India and the Production Linked Incentive scheme. Lower taxation on components and vehicles is anticipated to boost domestic manufacturing, create employment opportunities, and strengthen India’s position as a global automotive hub.
The reforms also support environmental goals by potentially encouraging consumers to replace older, polluting vehicles with newer, more efficient models. This shift supports the government’s clean mobility agenda while making personal transportation more accessible to a broader population segment.
The combination of reduced prices and festive season timing creates an unprecedented opportunity for Indian consumers to access personal mobility at more affordable rates, while positioning the automotive industry for sustained growth in the coming months.
