Vehicle retail sales up 2.84pc in August, festive season and GST 2.0 expected to drive strong growth: FADA

THEBUSINESSBYTES BUREAU

NEW DELHI, SEPTEMBER 8, 2025

India’s vehicle retail industry recorded a modest growth of 2.84 per cent in August, with total sales reaching 19,64,547 units compared to 19,10,312 units in the same month last year, according to the Federation of Automobile Dealers Associations (FADA). The performance was influenced by strong festive enquiries but tempered by customers deferring purchases in anticipation of price cuts under the newly announced GST 2.0 reforms.

Passenger Vehicle (PV) sales stood at 3,23,256 units, up 0.93 per cent from 3,20,291 units in August 2024. “The month began on a strong footing with festive bookings and healthy enquiries, but demand slowed in the latter half as buyers waited for GST-driven benefits,” FADA said in a statement.

Two-wheeler sales grew 2.18 per cent to 13,73,675 units, aided by festive demand during Onam and Ganesh Chaturthi. However, excessive rains and localised floods in North India disrupted rural demand, while supply constraints of popular scooter models limited conversions.

The commercial vehicle segment emerged as a bright spot, registering 8.55 per cent growth with sales of 75,592 units compared to 69,635 units last year. In contrast, three-wheeler sales dipped 2.26 per cent to 1,03,105 units from 1,05,493 units a year earlier.

Commenting on the performance, FADA President C.S. Vigneshwar said: “August traditionally ushers in festive cheer, with customers keen on auspicious-day deliveries. While enquiries and bookings were robust, final conversions slowed due to the GST 2.0 announcement. This historic reform embodies courage and clarity in indirect taxation, moving India towards a simplified two-slab structure with a special rate for select items.”

He added that the resilience of India’s auto retail sector, combined with GST 2.0 and festive fervour, is expected to unlock strong momentum from September onwards.

Looking ahead, FADA projected that September would be a “two-phase month” — muted in the first half due to Shraddh rituals and a wait-and-watch approach on GST, followed by a surge in the latter half as festive demand, policy clarity, and OEM schemes aligned to GST benefits converge.

“These schemes allow customers to book vehicles now while enjoying GST-aligned benefits, ensuring timely deliveries during Navratri and Durga Puja,” the association noted.

With GST 2.0 reforms, proactive industry strategies, and the onset of India’s biggest festivals, FADA expressed confidence that September would mark the start of a robust growth cycle for the automobile retail sector.