India’s Vehicle Sales Grow 2.84% in August Amid GST 2.0 Wait

Vehicle retail sales in india grew from 2.84% at 19,64,547 units in August comparing 19,10,321 units in the same month of last year,according to Federation of Automobile Dealers Association (FADA) the reason for the grew of the sales is because customer postpond purchases expecting a price cut ahead of GST reform.

FADA further stated that passenger Vehicle ales were marginally up at 3,23,256 units last month as compared to 3,20,291 units in August 2024.

According to Dealer’s body association Even though vehicle Passenger retails began with a positive notes and festive bookings with the modest growth of 0.93%  year-over-year but it slowed down in the later half as the GST 2.0 reform led many customers to postpone purchases,anticipating a price reduction.

In two wheeler segment FADA also added that Total vehicle retail sales in India grew by a modest 2.84% at 19,64,547 units in August as against 19,10,312 units in the same month last year, as customers postponed purchases expecting a price cut ahead of GST reforms,

In a statement FADA said that “Passenger Vehicle (PV) sales were marginally up at 3,23,256 units last month as compared to 3,20,291 units in August 2024." 

They also added that “Two-wheeler retail sales in August this year were at 13,73,675 units as against 13,44,380 units in the year-ago month, up 2.18%."

FADA said  though  the two-wheeler segment enquiries remained strong, during the onset of festivals such as Onam and Ganesh Chaturthi. However, excessive rains and localised floods in North India disrupted rural mobility, while erratic supply of popular scooter models constrained conversions.

It was also noted that "The landmark GST 2.0 announcement also led to buyers deferring purchases to September in anticipation of lower rates,"

“Despite these factors, overall sentiment is steady, and dealers remain confident that the festive season ahead will unlock more growth momentum,” FADA said. futher FADA stated that “The commercial vehicle segment witnessed a growth of 8.55% at 75,592 units as compared to 69,635 units in August last year,”

Three-wheeler retail sales were at 1,03,105 units as compared to 1,05,493 units in the year-ago month, down 2.26%.

"August traditionally ushers in festive cheer, with Onam and Ganesh Chaturthi heralding the season of joy. Customers continued to show strong enthusiasm with high enquiries and robust bookings, ensuring that vehicles are aligned for auspicious festive deliveries. The only issue was conversion, which saw a slowdown due to the benefits of GST 2.0 kicking in September,” FADA President C.S. Vigneshwar commented on the performance.

He stated that Lauding the recent GST rate cuts on automobiles, he said...”GST 2.0 marks a historic, people-first reset, moving India towards a citizen-friendly ‘Simple Tax’ with just two slabs, along with a special rate for a select few. It embodies courage, consensus, and clarity in indirect taxation.” He further added “The resilience of India’s auto retail industry, combined with the once-in-a-generation reform of GST 2.0, positions the sector for a robust festive season.”

Dealers remain confident that September will be a postive beginning of an accelerated growth cycle, powered by both policy tailwinds and festive fervour.  FADA said for auto retails, September will be a two-phase month: a muted first half due to Shraddh and GST wait-and-watch, followed by a sharp surge as policy clarity, festive sentiment, and OEM schemes that mirror upcoming GST reductions converge.”

"These schemes allow customers to book vehicles now while enjoying GST-aligned benefits, ensuring timely deliveries on their preferred auspicious dates such as Navratri and Durga Puja. Dealers across categories expect this strategy to unlock deferred demand and smoothen festive season supply," it said  FADA remains decisively optimistic With  GST 2.0 as landmark reform,  proactive OEM schemes, and the onset of India’s biggest festivalsthat September will mark the beginning of a strong growth cycle for auto retail,” the statement said.

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