Overall automobile sales have declined by more than 8% year on year in the 13 days between August 16 and 28, 2025 as a segment of buyers are seen postponing their purchase decisions anticipating a steep cut in goods and services tax (GST).
Prime Minister Narendra Modi had on August 15 announced during his Independence Day address that GST rates would be revised downwards for most products and services fueling speculation in the market causing anxiety and confusion.
As per data available on the Vahan portal, a total of 7,57,165 vehicles were registered in the said period compared with 8,25,516 units in the year-earlier period, down 8.27%.
As per the Vahan data, 6,372 units of heavy goods vehicles were sold compared with 6,972 units a year ago. And 1,40,515 units of light motor vehicles were sold compared with 1,43,404 units a year ago, down 2%. The two-wheeler (non-transport) segment witnessed registration of 5,33,401 units as compared with 5,97,875 units in the same period last year, down 11%.
In the three-wheeler category, 40,902 units were registered as compared with 43,145 units a year ago, down 5%.
In the light commercial vehicle segment, 1,40,515 units were registered as compared with 1,43,404 units a year ago, down 2%.
However, light passenger vehicle registrations saw a 5% increase to 11,997 units, compared with 11,393 units in the year ago period.
Several other segments too have reported growth. All automobile companies The Hindu spoke to declined to comment or share any numbers.
Elara Securities, through auto dealer checks, said two-wheeler sales were impacted due to deferred purchases in many regions on hopes of GST cut. However, there was steady demand in rural India as awareness on the GST cut impact was low in those regions, the brokerage said.
More postponements were seen in the PV segment as big-ticket buyers were more sensitive to the GST news, it said.
The Federation of Automobile Dealers Association (FADA), the apex body of all auto dealers, said there had been mixed response post the announcement on the GST cut.
“It’s a mixed bag since the announcement. While some buyers have decided to wait till clarity emerges, a large section of people have made purchases as dealers had offered discounts which would be not available after a few days. We have not seen any major drop and sales have been the same as last month,” FADA president C.S. Vigneshwar told The Hindu.
“Though a cut in GST would be beneficial for the sector in the medium to long term, in the short term we have seen a little bit of confusion. We urge the government to provide clarity as soon as possible,” he said.
“We had been petitioning the government to reduce GST as cars have become a necessity for mobility than a luxury product. Its good that the government is considering to reduce the rates which will lead to better sales,” he added.
Jefferies, a capital markets firm, said in a note that a potential GST cut should provide a boost to auto demand, especially in 2Ws and small PVs.
Addressing shareholders, Maruti Suzuki India Ltd. (MSIL) Chairman R.C. Bhargava said that GST cut on small cars would revive the industry and help a lot of people to shift from ‘risky’ two-wheelers.
It is understood that FADA and Society of Indian Automobile Manufactures (SIAM) had urged the government for an early decision of GST rate. The Finance Minister had indicated that the matter would be closed by September 22, 2025. The GST Council is expected to meet in the first week of September to discuss the slabs.
It is believed that the GST rate on cars will be brought down from 28% to 18%, but there is no clarity yet if it would be across the board or only for small cars.
(With data inputs from Ashokamithran T.)
Published – August 28, 2025 08:16 pm IST