The Indian auto industry recorded low sales growth in August 2025 as the global automotive manufacturing industry witnessed reduced vehicle deliveries. The downfall is that emerging consumers need to reduce prices due to the possible restructure of the Goods and Services Tax (GST). Potential buyers were very hesitant to buy, and this affected dealer-level dispatch in a number of segments.
Large car companies like Maruti Suzuki, Hyundai, Tata Motors, and Mahindra registered negative annual growth. According to industry observers, the dip is due to uncertainty about the next GST Council meeting and the expected change in the current tax structure.
Maruti Suzuki experienced an 8% decrease in dispatches to 1,31,278 units in July 2024 versus 1,43,075 units in August 2024. Mid-range growth was registered in compact cars, including Swift and Baleno, and mini cars, including Alto and S-Presso, showed a 6,853-unit decline in sales. Shipments of utility vehicles went down to 54,043.
Hyundai Motor India registered an 11% drop in domestic wholesales, with 44,001 units sold. Utility vehicle sales at Mahindra & Mahindra fell 9% to 39,399 units. Tata Motors recorded a 7% decline, shipping 41,001 units. Toyota Kirloskar Motor was the only company that reported a 2% increase in domestic wholesales, to 29,302 units. The company said that September would be a major month to monitor demand before the festive season.
The GST Council, headed by Finance Minister Nirmala Sitharaman, will meet on September 3-4. The debate will be on transitioning to a two-slab GST system of 5% and 18%. A 40% rate may be imposed on ultra-luxury cars and sin goods. Cars are subject to a 28% GST tax and a cess of 1% and 22%.
Carmakers restricted wholesale billing in August to prevent a build-up of stock in dealerships. Industry players believe that GST clarity would enhance consumer confidence and assist in improving sales in the coming festive season.
Bajaj Auto registered a 12% decline, with a total of 1,84,109 units sold in two-wheelers. TVS Motor recorded a 28.0% increase in sales to 3,68,862. Royal Enfield posted a 57% annual growth, and domestic sales stood at 1,02,876 units. Eicher Motors anticipates further demand when stable economic conditions and GST reforms result in more competitive pricing.