auto retail sales india august 2025 growth fada gst 2 festive demand forecast

Automobile retail sales in India witnessed a growth of 2.84 per cent year-on-year in the month of August, according to data shared by the Federation of Automobile Dealers Associations (FADA). This was contributed by growth in two-wheelers (2.18 per cent), passenger vehicles (0.93 per cent) and commercial vehicles (8.55 per cent), while tractors recorded an annual growth of 30.14 per cent.

FADA President, C S Vigneshwar said, "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 slowdown due to benefits of GST 2.0 kicking in September."

Retail sales of two-wheelers in August grew by 1.34% on a monthly basis and 2.18% on a yearly basis. However, excessive rains and localised flooding in northern India disrupted rural mobility, while erratic supplies of popular scooter models hampered conversions.

"Despite these factors, overall sentiment is steady, and dealers remain confident that the festive season ahead will unlock robust growth momentum," Vigneshwar noted.

Commercial vehicle (CV) retail sales grew 8.55 per cent year-on-year in August but declined marginally by 1.11 per cent on a monthly basis. According to the report, dealer feedback suggests that product acceptance and order clearances remained healthy, supported by new contracts and replacement demand from e-commerce.

However, "market sentiment in the last week was impacted by speculation around GST reductions, leading to deferment of purchases. With rains subsiding and festive demand ahead, dealers remain confident of stronger traction in September," Vigneshwar stated.

Retail sales of passenger vehicles (PVs) in August registered a marginal growth of 0.93 per cent year-on-year, while declining by 1.63 per cent on a month-on-month basis. At the end of August, average inventory levels stood at a high of around 56 days.

"Dealers expect September to deliver a sharper rebound, as GST clarity and auspicious festive days converge to unlock deferred demand," Vigneshwar concluded.

The report said GST 2.0, which will be implemented from September 22, will prove to be a "game-changer", reducing household expenses, increasing consumption and improving the competitiveness of industry. This could reduce inflation by up to 1.1 percent.

FADA expects September to be a two-phase month: a slowdown in the first half due to Shraddh and GST, followed by a sharp rebound led by policy clarity, festive sentiment, and OEM plans reflecting upcoming GST reductions.

"These schemes enable customers to book vehicles now, while enjoying GST-aligned benefits, ensuring timely deliveries on their preferred auspicious dates, such as Navratri and Durga Puja. Dealers across categories expect this strategy to unlock deferred demand and smoothen festive season supply," the report noted.

With GST 2.0 being termed as a landmark reform, proactive OEM schemes and the onset of India’s biggest festivals, FADA is decisively optimistic that September will mark the start of a strong growth cycle for auto retail.

With ANI Inputs