The indian auto industry is gearing up for a robust festive season, buoyed by the landmark GST 2.0 reforms and growing consumer anticipation. Here’s a breakdown of recent trends, challenges, and the outlook for vehicle retail in India.

1. Overall Vehicle Sales Show Modest Growth

Total vehicle retail sales in august 2025 grew by 2.84%, reaching 19,64,547 units compared to 19,10,312 units in august 2024. The slight growth reflects customers postponing purchases in expectation of price cuts following GST reforms.

· Passenger vehicles (PV): 3,23,256 units, up 0.93% YoY

· Two-wheelers: 13,73,675 units, up 2.18% YoY

· Commercial vehicles: 75,592 units, up 8.55% YoY

· Three-wheelers: 1,03,105 units, down 2.26% YoY

2. Passenger Vehicle Market: Steady but Cautious

PV sales recorded marginal growth as customers remained cautious, waiting for GST-data-aligned price reductions. While festive bookings and enquiries were healthy, many buyers deferred purchases anticipating lower rates under GST 2.0.

3. Two-Wheelers: Festival-Fueled Demand

Two-wheeler sales benefited from festivals like Onam and Ganesh Chaturthi, with many buyers preferring auspicious-day deliveries. However, excessive rains, floods, and supply disruptions in popular scooter models slowed conversion.

4. Commercial Vehicles: Positive Momentum

The commercial vehicle segment outperformed, with 8.55% growth in august, showing resilience despite seasonal and logistical challenges.

5. Impact of GST 2.0 on auto Retail

According to FADA President CS Vigneshwar, GST 2.0 represents a people-first reset, simplifying taxation with:

· Two main slabs for most goods

· Special rates for a select few items, including automobiles

The announcement encouraged buyers to defer purchases, resulting in a temporary slowdown in august but boosting optimism for September.

6. Festive Season Outlook: Deferred Demand to Surge

FADA expects september to be a two-phase month:

1. Muted first half: Due to Shraddh period and wait-and-watch on GST benefits

2. Strong second half: Policy clarity, festive sentiment, and OEM schemes data-aligned with GST cuts will drive bookings and timely deliveries

7. OEM Schemes: Encouraging Early Bookings

Automobile manufacturers are offering GST-data-aligned schemes, enabling customers to:

· Book vehicles early

· Receive benefits reflecting upcoming GST rate reductions

· Ensure delivery on auspicious festival dates, including Navratri and Durga Puja

8. Dealers Confident About Strong Growth Cycle

FADA highlights that the resilience of the auto sector, combined with policy tailwinds and festive fervour, positions the industry for a robust growth cycle. Dealers expect deferred demand from august to unlock in September, supporting supply and sales momentum.

Conclusion:
With GST 2.0 reforms, proactive OEM strategies, and the onset of India’s biggest festivals, the auto industry is poised for a strong and sustained growth period, making it an ideal time for both buyers and sellers to capitalize on the festive season.

 

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