Vehicle Retail Sales in Aug Grow 2.84% at 19,64,547 Units: FADA

Total vehicle retail sales in India grew by a modest 2.84 per cent 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, Federation of Automobile Dealers Associations said on Monday.

Passenger vehicle sales were marginally up at 3,23,256 units last month as compared to 3,20,291 units in August 2024, Federation of Automobile Dealers Associations (FADA) said in a statement.

PV retails in August recorded a modest growth of 0.93 per cent YoY. The month began on a positive note with healthy enquiries and festive bookings, but momentum slowed in the latter half as the announcement of GST 2.0 reforms led many customers to postpone purchases, anticipating a price reduction, the dealer's body said.

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 per cent, it added.

FADA said in the two-wheeler segment enquiries remained strong, fuelled by the onset of festivals such as Onam and Ganesh Chaturthi, with many customers keen on auspicious-day deliveries. However, excessive rains and localised floods in North India disrupted rural mobility, while erratic supply of popular scooter models constrained conversions.

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

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

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 per cent.

Commenting on the performance, FADA President CS Vigneshwar said: "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." 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 said, "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 herald the beginning of an accelerated growth cycle, powered by both policy tailwinds and festive fervour." On the near-term outlook, 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.

With GST 2.0 as a landmark reform, proactive OEM schemes, and the onset of India's biggest festivals, FADA remains decisively optimistic that September will mark the beginning of a strong growth cycle for auto retail, the statement said.