Auto retail sales up 2.8% in August 2025, GST 2.0 holds back stronger growth: FADA

Share via: Indian auto retail sales rose 2.84 per cent YoY in August 2025, but GST 2.0 rollout kept buyers cautious. Passenger vehicles and two-wheelers saw deferred demand, while CVs and 3Ws held steady. Festive season and GST clarity expected to trigger a sharp rebound. …Read More The Indian Auto Industry saw total retails of of 19.64 lakh units, up 2.84 per cent year-on-year, but nearly flat month-on-month. (Representative Image) View Personalised Offers on Check Offers For the Indian Auto Industry, August 2025 was a month where optimism ran ahead of actual numbers. The Federation of Automobile Dealers Associations (FADA) reported overall retail sales of 19.64 lakh units, up 2.84 per cent year-on-year, but nearly flat month-on-month. Beneath the modest growth lies a story of strong enquiries, eager bookings, and customers pressing pause until the new GST framework comes into play later this month. “August was a classic case of enquiries being healthy but conversions slower,” said FADA President C.S. Vigneshwar. “Many buyers preferred to wait for the GST 2.0 rollout on September 22, which created a holding pattern across segments.” Also Read : PV retail sales surge 2.45%, two-wheelers post 4.73% growth: FADA Passenger Vehicles: Bookings strong, deliveries deferredPassenger vehicle sales in August touched 3,23,256 units, up 0.93 per cent YoY but down 1.63 per cent MoM. The early part of the month saw momentum from Onam and Ganesh Chaturthi deliveries, but the second half cooled off as customers postponed purchases to benefit from GST changes. Heavy rain and flooding in urban areas restricted showroom traffic.
Dealer inventory of EVs averaged 56 days, further affecting a timid marketplace. SUVs and sedans were still the most queried categories, but buyer reluctance and supply imbalances retarded sales from realizing their potential. Vigneshwar noted, “The festive season, beginning late September, should act as a release valve. With interest rates softening and GST rationalisation providing transparency, passenger vehicle sales are expected to pick up sharply.” Two-Wheelers: Rural rains delay, festive spirit promises recoveryTwo-wheeler sales stood at 13,73,675 units, marking a 2.18 per cent YoY rise and 1.34 per cent MoM growth. Enquiries were robust, but heavy rains in northern states inhibited rural conversions. Scooter sales remained solid, though commuter motorcycles experienced delayed decision-making. Dealers showed increased bookings against favorable delivery dates in September and October, suggesting a pipeline of demand accumulating. “Rural demand is closely tied to agriculture and monsoon cycles. With sowing stabilising and GST set to bring uniformity in pricing, two-wheelers could see a stronger bounce than other segments once deliveries begin in the festive weeks,” Vigneshwar said. Also Read : Passenger vehicle sales stay in slow lane for 4th straight month Commercial Vehicles: GST Pause Stalls MomentumThe commercial vehicle category posted 75,592 units, an 8.55 per cent YoY growth but down 1.11 per cent MoM. Light and medium CVs experienced support from ecommerce and school bus orders, but heavy trucks experienced pushback near the end of the month. Operators preferred to hold back GST clarity before making new purchases, which damped momentum. Vigneshwar observed, “GST 2.0 is a positive step towards simplification, but in the short term, it has created a wait-and-watch approach in the CV segment. Once festive logistics demand kicks in, growth should return.” Three-Wheelers: Passenger Demand Holds, EV Weakness PersistsThree-wheeler sales came in at 1,03,105 units, down 2.26 per cent YoY and 7.47 per cent MoM. Passenger three-wheelers registered modest gains, but e-rickshaw sales fell sharply by 16.6 per cent YoY, pointing to both market saturation and cautious financing. Goods carriers provided some cushion with double-digit growth. “Passenger demand in smaller towns is expected to hold, but the EV sub-segment will need renewed policy and financing support, especially with GST changes in play,” Vigneshwar said. GST 2.0: The Silent Driver of SentimentGST 2.0, which was rolled out on September 22, became the dominant theme in segments. Consumers from PVs to CVs were waiting for simplified slabs of tax, hoping for clarity and likely marginal cost benefits. “GST 2.0 is not just a tax reform; it is a confidence booster,” Vigneshwar emphasised. “Consumers want to make big-ticket purchases in an environment of certainty. By aligning prices and reducing confusion, GST 2.0 will unlock deferred demand and strengthen festive sentiment across the board.” The Road Ahead: September as the Inflection PointFADA’s reading of August is one of deferred demand rather than lost demand. With GDP steady at 6.3–6.8 per cent, inflation low, and monsoon coverage favourable, the building blocks for a festive surge are already in place. “September will be divided into two halves,” Vigneshwar concluded. “The first, during Shraddh, will remain muted, but post-September 22, once GST 2.0 and Navratri align, we expect a sharp release of pent-up demand across passenger vehicles, two-wheelers, CVs, and three-wheelers alike.” Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 08 Sept 2025, 09:53 am IST
Source: hindustantimes.com