Domestic passenger vehicle (PV) wholesales dropped 7.3 per cent year on year to about 330,000 units in August, as customers awaited a decision by the GST Council on 4 September on reducing the tax on automobiles from 28 per cent to 18 per cent.
Maruti Suzuki India (MSIL), the country’s largest carmaker, recorded a 7.5 per cent YoY decline in wholesales—dispatches to dealers—in August to 144,145 units. Senior executive officer, marketing and sales, MSIL, said the company calibrated dispatches in line with demand. “Till 15 August, there was good traction in terms of bookings,” he said at a press conference.
In his Independence Day address on 15 August, Prime Minister Narendra Modi announced that the GST structure would be streamlined into two main slabs of 5 per cent and 18 per cent, with a higher bracket of 40 per cent for luxury or harmful items. This would replace the current four-tier structure.
The GST Council will meet on 3–4 September to discuss rate rationalisation. Automobiles, currently taxed at 28 per cent, are expected to move to the 18 per cent slab. “Once GST reforms are announced, we expect good sales in the market,” he said.
In August 2024, the industry’s domestic PV sales stood at 356,113 units. In August 2025, sales dropped to about 330,000 units, plus or minus 5,000 units, he added.
Many automakers consciously avoided pushing vehicles to dealers. “We should not read too much into dispatches this month. The real picture about demand will emerge once the GST rate is rationalised. Bookings are still very good. People continue to come to our showrooms,” he said.
An tax expert said anticipation of GST rationalisation was a key factor behind the slowdown in PV sales, but not limited to autos. “Similar patterns are being observed in consumer durables such as air conditioners and refrigerators—currently taxed at 28 per cent—which have seen reduced footfalls on e-commerce platforms. Consumers across multiple discretionary sectors appear to be deferring high-value purchases in anticipation of price corrections,” he said.
In autos specifically, seasonal factors such as the monsoon also contributed to a temporary dip in rural demand, particularly for entry-level and utility vehicles. “At the same time, many OEMs continued to push dispatches aggressively, leading to elevated inventory at dealerships. This has increased working capital pressure on dealer partners and underscores the need for better alignment between supply and actual retail demand. A more agile and collaborative supply chain approach will be critical to maintaining financial health across the ecosystem,” he added.
The domestic PV sales of Mahindra & Mahindra dropped 9 per cent YoY to 39,399 units in August. CEO, automotive division, M&M, said: “With the final GST announcement approaching, we consciously decided to bring down wholesale billing to minimise stock at dealerships. We look forward to the GST rationalisation, which would drive demand through the festive season.”
In the two-wheeler segment, Bajaj Auto and Honda Motorcycle and Scooter India recorded a fall in domestic sales in August, while TVS Motor reported a 28 per cent YoY increase in domestic two-wheeler sales to 368,862 units.
