India auto retail records 2.84 pc YoY growth in August, GST 2.0 and festive demand expected to boost sales: FADA

NEW DELHI: The month of August concluded with a 2.84 per cent year-on-year (YoY) growth, led by upticks in performances in 2-wheelers (2.18 per cent), passenger vehicles (0.93 per cent), and commercial vehicles (8.55 per cent), while tractors registered a 30.14 per cent YoY growth. Only 3-wheelers declined by 2.26 per cent, as well as construction equipment by 26.45 per cent, as per a FADA report.

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.”

The two-wheeler retails in August registered a growth of 1.34 per cent month-on-month (MoM) and 2.18 per cent YoY. However, excessive rains and localised floods in North 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 noted.

Commercial vehicle (CV) retails in August grew by 8.55 per cent YoY but marginally declined by 1.11 per cent MoM. According to the report, dealer feedback indicates that product acceptance and order clearances remained healthy, supported by new contracts from e-commerce and replacement demand.

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.

Passenger Vehicle (PV) retails in August recorded a small growth of 0.93 per cent YoY while declining by 1.63 per cent MoM. At the close of August, average inventory levels stood 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,” Vigneshwar concluded.

The report noted that the rollout of GST 2.0 from 22nd September is set to be a “game-changer”, lowering household expenses, lifting consumption, and improving industry competitiveness. It could reduce inflation by up to 1.1 percentage points.

FADA expects September to be a two-phase month: a muted first half due to Shraddh and GST wait-and-watch, followed by a sharp surge as policy clarity, festive sentiment, and OEM schemes that mirror upcoming GST reductions converge.

“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 as a landmark reform, proactive OEM schemes, and the onset of India’s biggest festivals, FADA remains decisively optimistic that September will mark the beginning of a strong growth cycle for auto retail. (ANI)