India’s auto retail sector registered a year-on-year (YoY) growth of 2.84% in August, driven by stronger performances in two-wheelers (2.18%), passenger vehicles (0.93%), commercial vehicles (8.55%) and tractors (30.14%), said a report by the Federation of Automobile Dealers Associations (FADA). However, three-wheelers declined by 2.26%, while construction equipment saw a sharper fall of 26.45%.
FADA President C.S. Vigneshwar said the month reflected strong festive sentiment with Onam and Ganesh Chaturthi boosting customer enthusiasm. “Customers continued to show high interest with strong enquiries and robust bookings, ensuring vehicles are aligned for auspicious festive deliveries. The only challenge was conversion, which slowed as buyers awaited the benefits of GST 2.0 kicking in September,” he said.
In the two-wheeler segment, retail sales grew 1.34% month-on-month (MoM) and 2.18% YoY. However, excessive rainfall and localised flooding in northern India disrupted rural mobility, while erratic supply of popular scooter models constrained conversions. “Despite these factors, overall sentiment is steady, and dealers remain confident that the festive season ahead will unlock robust growth momentum,” Vigneshwar added.
Commercial vehicles registered an 8.55% YoY growth in August, but dipped 1.11% MoM. Dealers reported healthy order clearances supported by replacement demand and new e-commerce contracts. However, sentiment weakened in the last week due to speculation around GST reductions, which led to purchase deferments. Vigneshwar said that with rains subsiding and festive demand picking up, stronger traction is expected in September.
Passenger vehicles posted a modest 0.93% YoY growth but declined 1.63% MoM, with inventory levels remaining elevated at around 56 days. “Dealers expect September to deliver a sharper rebound, as GST clarity and auspicious festive days converge to unlock deferred demand,” he said.
The rollout of GST 2.0 from September 22 is expected to be a “game-changer,” the report said, as it will lower household expenses, boost consumption, and improve industry competitiveness. The reform is projected to reduce inflation by up to 1.1 percentage points.
FADA expects September to unfold in two phases: a muted first half due to the Shraddh period and consumer wait-and-watch behaviour ahead of GST 2.0, followed by a sharp surge in the second half as policy clarity, festive sentiment, and OEM schemes converge. “These schemes enable customers to book vehicles now while enjoying GST-aligned benefits, ensuring timely deliveries on auspicious dates such as Navratri and Durga Puja,” the report highlighted.
With GST 2.0 as a landmark reform, proactive OEM strategies, and the onset of India’s biggest festive season, FADA said it remains “decisively optimistic” that September will mark the start of a strong growth cycle for auto retail.
(With inputs from ANI)
