Car sales fall in August 2025, but two-wheelers ride festive demand: Siam

PV dispatches fell 9% in August to 321,840 units, while two-wheeler sales rose 7% and three-wheeler sales hit a record, as buyers awaited GST-driven price cuts

Passenger vehicle (PV) dispatches to dealerships dropped by 9 per cent year-on-year in August, even as two-wheeler sales recorded steady growth, according to data released by the Society of Indian Automobile Manufacturers (Siam) on Monday, reported news agency PTI.

 

Passenger vehicle wholesales, the number of units shipped by manufacturers to dealers, fell to 321,840 units in August 2025, compared with 352,921 units in the same month last year.

 

Two-wheeler sales grow on rural demand

Two-wheeler sales rose 7 per cent to 1,833,921 units in August, up from 1,711,662 units a year earlier. The segment’s performance was driven by rural demand and festive season buying. Within this segment, scooter sales rose 13 per cent to 683,397 units, while motorcycle dispatches grew 4 per cent to 1,106,638 units.

Three-wheelers sees record sales

Three-wheeler sales marked a record performance for the month of August, with 75,759 units dispatched, an 8 per cent rise from 69,962 units in the same month last year.

 

Siam said growth in two- and three-wheelers helped balance overall volumes despite the passenger vehicle slump.

Weak sentiment, GST 2.0 delays purchases

Siam Director General Rajesh Menon said the decline stemmed from automakers recalibrating dispatches amid weak consumer sentiment. He added that many potential buyers deferred purchases in anticipation of lower prices following a Goods and Services Tax (GST) reduction on vehicles.

 

The GST Council reduced rates on small cars, sub-350cc two-wheelers, and three-wheelers to 18 per cent from 28 per cent, effective September 22. Following this, several automakers have revised prices of vehicles, passing on this tax benefit to the consumers. Industry bodies believe the slowdown on vehicle purchases are due to anticipation of price cuts following the announcement.

Revised tax framework on cars

From September 22, the revised GST rates will apply: petrol and diesel cars with engines of up to 1,200 cc and 1,500 cc will be taxed at 18 per cent, while larger engines will attract the highest slab of 40 per cent. Electric vehicles will continue to be taxed at a concessional 5 per cent.

 

Menon stated that the tax cut is expected to widen mobility access and inject fresh momentum into the automotive sector during the upcoming festive season.

 

The price cut also coincides with the festival season, which has traditionally been a strong sales period for auto sales. Industry experts believe that the sector will see a demand recovery after the tax cuts go into effect.