According to the Federation of Automobile Dealers Associations (FADA), August 2025 saw enquiries remain strong across categories, though actual conversions were muted as customers postponed purchases in anticipation of tax benefits under the new GST regime, effective September 22.
“GST 2.0 marks a historic, people-first reset — courage, consensus, and clarity in taxation,” said FADA President C S Vigneshwar.
“The resilience of India’s auto retail industry, combined with this once-in-a-generation reform, positions the sector for a robust festive season. Dealers are confident that September will herald the beginning of an accelerated growth cycle,” he added.
August snapshot
Vehicle retails in August grew 2.84% year-on-year, with tractors leading the charge at +30.14% on the back of strong monsoons, healthy crop outlook, and rural liquidity. Two-wheelers rose 2.18%, passenger vehicles 0.93%, and commercial vehicles 8.55%. However, three-wheelers (-2.26%) and construction equipment (-26.45%) reported a decline.
Festive enquiries during Onam and Ganesh Chaturthi were buoyant, but excessive rains in parts of North India and anticipation of GST reductions slowed actual sales. Passenger vehicle demand remained steady, though inventories climbed to about 56 days due to deferred purchases and supply mismatches.
Near-term outlook
FADA expects September to play out in two distinct phases. The first half may remain muted due to the Shraddh period and GST wait-and-watch behaviour. But from Navratri onwards, dealers anticipate a surge as festive deliveries, GST clarity, and OEM schemes — which already mirror upcoming GST benefits — converge to boost sales.
Favourable macros add to the optimism: GDP is tracking 6.3–6.8% growth, CPI inflation has dropped to a multi-year low of 1.55%, and rainfall is 8% above normal, boosting rural sentiment. Economists expect GST 2.0 to lower household expenses and lift consumption further.
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.
