Auto sales rise 0.02% in August, GST 2.0 defers sales to September

The two-wheeler segment registered a 1.34 per cent month-on-month growth, rising 2.18 per cent Y-o-Y, aided by festive enquiries around Onam and Ganesh Chaturthi

India’s auto retail sector posted flat month-on-month (M-o-M) growth at 0.02 per cent in August, while recording a modest 2.84 per cent rise year-on-year (Y-o-Y), according to data from the Federation of Automobile Dealers Associations (FADA).

 

The two-wheeler segment registered a 1.34 per cent M-o-M increase and a 2.18 per cent rise Y-o-Y, supported by festive enquiries during Onam and Ganesh Chaturthi. However, heavy rainfall and uncertainty around the new GST framework weighed on actual sales, as buyers deferred purchases in anticipation of possible price cuts.

 

PV sales slip 1.63%

Passenger vehicle (PV) sales slipped 1.63 per cent M-o-M, with inventories piling up to nearly 56 days. While bookings remained healthy, both weather-related supply disruptions and a wait-and-watch approach ahead of GST 2.0 weighed on retail momentum.

 

The industry body FADA indicated that heavy rains and floods in some regions disrupted walk-ins, while uneven supply of high-demand models and aggressive original equipment manufacturer (OEM) targets added to the pressure. “However, demand fundamentals remain intact, supported by festive sentiment and strong customer interest in both ICE and EV models,” FADA reported. 

CV sales contract 1.11%

Meanwhile, commercial vehicles (CV) contracted 1.11 per cent M-o-M while delivering a strong 8.55 per cent Y-o-Y rise on the back of e-commerce activity and replacement demand. However, sentiment softened towards the end of the month due to GST-related caution. Tractors reported exceptional growth, driven by strong monsoon, rural liquidity, and crop outlook. Three-wheelers logged the largest decline, falling 7.47 per cent M-o-M.

 

GST cuts stoke buyer optimism

Commenting on the GST 2.0 reforms, FADA President C S Vigneshwar said, “The announcement has strengthened buyer optimism, with many families preferring to align their purchases with the forthcoming reduced GST rates.” This is a reflection of trust in policy, which has not dampened demand but merely deferred a part of it to September, he said.

 

Vigneshwar expects robust growth in the upcoming festive season, supported by the resilience of India’s auto retail industry and the implementation of GST reforms. “Dealers remain confident that September will herald the start of an accelerated growth cycle, powered by policy tailwinds and festive demand,” he said.