India’s Light Vehicle (LV) wholesale figures for August fell by 4% month-on-month (MoM) to 380k units, with Passenger Vehicles (PVs) down by 5% to 321k units and Light Commercial Vehicles (LCVs) with a gross vehicle weight of up to 6T staying flat compared to last month, at 59k units. On a year-on-year (YoY) basis, LV sales declined by 5%, driven by a downturn in PVs which plunged by 8%, despite LCVs surging upward by 10%.

The MoM decline in PV wholesale volumes was driven by speculation that the Indian government might reduce Goods and Services Tax (GST) rates – a change that was confirmed in early September. As a result, OEMs curtailed dispatches as they anticipated that buyers would delay making purchases until the situation was clarified. This caution offset what would normally have been a strong sales month, given the start of the Onam and Ganesh Chaturthi festival seasons.

Similarly, retail sales of PVs and LCVs in August experienced a negligible 1% MoM decrease to 369k units, compared to 374k units in July, according to data from the Federation of Automobile Dealers Associations (FADA). PV retail sales decreased by 2% MoM, but LCV sales grew by 1% MoM. FADA also noted that the decline in PV retail sales was due to uncertainty over the GST rate, as well as heavy rains and floods in some regions that deterred customer visits to dealerships.

At the end of August, PV inventory levels in India remained stable at 56 days, consistent with 55 days in July, according to data from FADA.

Through the first eight months of the year overall, LV sales remained flat at 3.3 mn units, comprising 2.8 mn PVs (0% YoY) and 462k LCVs (+1% YoY).

Looking ahead, demand is expected to rise in September and subsequent months following the GST rate cut on automobiles and household items, which should lower costs and increase disposable income. The ongoing festival season, combined with price reductions from lower GST rates and aggressive marketing, is also likely to further stimulate demand.

As such, we have nominally raised our LV forecasts for India by 2% (+96k units) for 2025 and 1% (+58k units) for 2026. This translates to a projection of a 3% YoY increase in LV sales in 2025, reaching 5.1 mn units, followed by a total of 5.3 mn units (+5% YoY) in 2026. In the long term, our 2032 outlook remains unchanged at 6.8 mn units.

This article was first published on GlobalData’s dedicated research platform, the Automotive Intelligence Center.