Passenger vehicle sales inch up 0.93%; GST 2.0 reforms prompt buyers to defer purchases.
Pune: Vehicle retail sales in India rose 2.84 per cent year-on-year, while passenger vehicle retail in August recorded a modest growth of 0.93 per cent year-on-year, the Federation of Automobile Dealers Association or FADA said on Monday.
It said sales are expected to rise during the festive season and due to the government's Goods and Services Tax (GST) rate cuts.
All vehicle retail sales grew by 2.84 per cent at 19,64,547 units in August as against 19,10,312 units in the same month last year, as buyers deferred purchases, expecting a price cut ahead of GST reforms.
“Passenger Vehicle (PV) sales were marginally up at 3,23,256 units last month as compared to 3,20,291 units in August 2024,” FADA said in a statement.
“August 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,” FADA said.
Two-wheeler retail sales in August also rose 2.18 per cent at 13,73,675 units as against 13,44,380 units in the year-ago month, up 2.18%, it noted.
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 localized 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 pointed out.
“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 down by 2.26 per cent at 1,03,105 units as compared to 1,05,493 units in the year-ago month.
"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," said FADA President CS Vigneshwar.
He 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.
