Auto sales dip in August: Buyers delay purchases; GST rejig hopes keep demand in check

Leading automakers, including Maruti Suzuki, Hyundai, Mahindra, and Tata Motors, reported a decline in vehicle dispatches to dealers in August as buyers deferred purchases amid expectations of lower prices under the proposed goods and services tax (GST) rejig.

Maruti Suzuki India, the country’s largest carmaker, posted an 8% year-on-year fall in passenger vehicle dispatches at 1,31,278 units last month, compared with 1,43,075 units in August 2024, PTI reported. While compact car sales, including Baleno, Dzire, Ignis, and Swift, edged up to 59,597 units from 58,051 units, mini cars such as Alto and S-Presso slumped to 6,853 units against 10,648 units a year earlier. Utility vehicle dispatches fell 14% to 54,043 units from 62,684 units.


Hyundai Motor India said domestic wholesales declined 11% to 44,001 units from 49,525 units a year earlier. “Our goal is to establish India as a strategic manufacturing base for emerging economies and to become Hyundai's largest export hub outside South Korea,” said COO Tarun Garg, without commenting on the domestic slowdown.

Mahindra & Mahindra reported a 9% drop in utility vehicle sales at 39,399 units versus 43,277 units a year earlier. “With the final GST announcement approaching, we consciously decided to bring down the wholesale billing to minimise the stock being carried by our dealers,” said Nalinikanth Gollagunta, CEO of M&M’s automotive division. He expressed optimism that GST rationalisation would aid festive-season demand.

Tata Motors’ passenger vehicle dispatches also declined 7% to 41,001 units from 44,142 units in August 2024.

In contrast, Toyota Kirloskar Motor posted a 2% rise in domestic wholesales at 29,302 units, compared with 28,589 units a year earlier. “September will be an important phase for the industry overall. We will closely observe market trends as they unfold,” said Varinder Wadhwa, Vice President, Sales-Service-Used Car Business.

The GST Council, chaired by Finance Minister Nirmala Sitharaman, is set to meet on September 3-4 to discuss moving to a two-slab system of 5% and 18%, with ultra-luxury cars and sin goods attracting a 40% rate. Automobiles are currently taxed at 28%, with an additional cess of 1-22% depending on vehicle type.

In two-wheelers, Bajaj Auto reported a 12% fall in sales at 1,84,109 units, while TVS Motor saw a 28% rise at 3,68,862 units. Royal Enfield posted strong growth, with domestic sales soaring 57% year-on-year to 1,02,876 units. “Our performance in August reflects a positive momentum as we step into the festive season, which traditionally drives strong demand,” said Royal Enfield CEO and Eicher Motors MD B Govindarajan.