CHENNAI: India's automobile retail sector experienced a modest year-on-year (YoY) growth of 2.84 percent in August 2025, with total vehicle sales reaching 1,964,547 units compared to 1,910,312 units in the same month the previous year. This data, released by the Federation of Automobile Dealers Associations (FADA), highlights a mixed performance across various vehicle segments.
Passenger vehicles: Marginal growth
Passenger vehicle sales saw a slight increase of 0.93 percent YoY, totaling 323,256 units in August 2025, up from 320,291 units in August 2024. The initial part of the month witnessed strong consumer interest, driven by festive bookings and healthy inquiries. However, the latter half experienced a slowdown as customers postponed purchases in anticipation of the Goods and Services Tax (GST) reforms, which were expected to reduce vehicle prices. This cautious approach led to a moderation in sales momentum.
Two-wheelers: Steady performance
The two-wheeler segment recorded a 2.18 percent YoY growth, with sales reaching 1,373,675 units in August 2025, compared to 1,344,380 units in the same month the previous year. The onset of festivals such as Onam and Ganesh Chaturthi contributed to increased consumer interest, particularly for auspicious-day deliveries. However, challenges like excessive rainfall and localized floods in North India disrupted rural mobility, while supply constraints of popular scooter models affected conversions. Additionally, the anticipation of GST reforms led many buyers to defer their purchases.
Commercial vehicles: Robust growth
Commercial vehicle sales experienced a notable 8.55% YoY increase, totaling 75,592 units in August 2025, up from 69,635 units in the same month the previous year. This growth was driven by factors such as increased e-commerce activity, replacement demand, and improved infrastructure development. The commercial vehicle segment demonstrated resilience, reflecting the ongoing economic activities and logistical needs across the country.
Tractors: Exceptional surge
The tractor segment witnessed an exceptional 30.14 percent YoY growth, marking a significant rebound from previous months. This surge can be attributed to favorable monsoon conditions, which positively impacted agricultural activities, leading to increased demand for tractors. The positive outlook in the agricultural sector contributed to this remarkable growth in tractor sales.
Three-wheelers: Slight decline
Three-wheeler sales experienced a minor decline of 2.26 percent YoY, with 103,105 units sold in August 2024, compared to 105,493 units in the same month the previous year. This dip can be attributed to factors such as regulatory changes, urban mobility trends, and shifts in consumer preferences, affecting the demand for three-wheelers.
Outlook for September
Looking ahead, FADA anticipates a more robust performance in September 2025, driven by the festive season and the implementation of GST reforms. The government's decision to reduce GST rates on small cars and two-wheelers from 28 percent to 18 percent, effective from September 22, is expected to stimulate consumer demand. Dealers remain optimistic that the combination of festive fervor and favorable policy changes will lead to accelerated growth in the coming months.