India’s automobile industry recorded mixed sales trends in August 2025, with passenger vehicle sales witnessing a decline as customers delayed purchases ahead of the upcoming GST reforms. Meanwhile, the two- and three-wheeler segments reported steady growth, reflecting diverse consumer responses across segments.
According to data from the Society of Indian Automobile Manufacturers (SIAM), the overall passenger vehicle wholesales dropped 8.8% YoY to 3,21,840 units. In contrast, two-wheeler dispatches rose 7%, and three-wheelers marked their best-ever August sales, underlining the asymmetric impact of policy anticipation across the mobility landscape.
Background: GST reforms influence buying patterns
The GST reforms, set to take effect on September 22, are expected to lower vehicle prices by rationalising tax slabs. Under the new structure:
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Petrol and diesel cars up to 1,200 cc and 1,500 cc will attract 18% GST
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Larger vehicles will continue under the 40% GST slab
Consumers are choosing to postpone purchases in anticipation of these changes. SIAM Director General Rajesh Menon confirmed that the dip in August sales reflects strategic delays by buyers waiting to benefit from the upcoming tax cuts.
Major automakers like Tata Motors, Hyundai, and Mahindra & Mahindra have already announced they will fully pass on GST savings to customers once the reforms are in place.
Also read: GST Cuts Boost MSMEs in Food & Logistics
Two- and three-wheeler segments stay resilient
While car sales faltered, two-wheeler dispatches reached 18.33 lakh units, up from 17.11 lakh in August 2024. Segment-wise:
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Scooter sales jumped 13% to 6.83 lakh units
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Motorcycle sales rose 4% to 11.06 lakh units
The three-wheeler category saw a record 75,759 units sold — an 8.3% rise — led by growth in passenger and goods carriers.
However, e-rickshaw sales dropped sharply by 49.4%, while e-cart volumes soared 362.9%, signaling a shift in electric mobility dynamics within the category.
Industry outlook ahead of GST 2.0 and festive season
Despite the temporary decline in passenger vehicle sales, production levels across all vehicle categories remained steady, as manufacturers anticipate demand revival post-GST implementation and during the upcoming festive season.
The broader industry expects the GST 2.0 framework to enhance affordability, improve transparency, and boost demand — particularly for mass-market vehicles and fuel-efficient mobility solutions.
For MSMEs involved in auto parts manufacturing, distribution, and fleet services, the GST changes may also translate to better margins, lower input costs, and improved business volumes in the coming quarters.