Passenger Vehicle dispatches to dealerships drop by 9%; buyers eye GST rate cut benefits

The passenger vehicle (PV) dispatches to dealerships dropped by 9 per cent year-on-year in August, data released by the Society of Indian Automobile Manufacturers (SIAM) said, adding the two-wheeler sales recorded steady growth.

The data further said that the PV wholesales fell to 321,840 units in August compared with 352,921 units in the same month last year.

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Two-wheeler sales rose 7 per cent to 1,833,921 units in August, up from 1,711,662 units a year earlier, driven by rural demand and festive season buying.

Scooter sales rose 13 per cent to 683,397 units, while motorcycle dispatches grew 4 per cent to 1,106,638 units, it added.

Further, the three-wheeler sales marked a record performance for August, with 75,759 units dispatched, an 8 per cent rise from 69,962 units in the same month last year.

Speaking on the data, Siam Director General Rajesh Menon said the decline stemmed from automakers recalibrating dispatches amid weak consumer sentiment. “Many potential buyers deferred purchases in anticipation of lower prices following a Goods and Services Tax (GST) reduction on vehicles.”

Menon stated that the tax cut is expected to widen mobility access and inject fresh momentum into the automotive sector during the upcoming festive season.

During the 56th meeting, the GST Council announced the reduction of rates on small cars, sub-350cc two-wheelers, and three-wheelers to 18 per cent from 28 per cent.

After the GST rate cut, key two-wheeler manufacturers, including Bajaj Auto, Honda Motorcycle & Scooter India (HMSI), Royal Enfield of Eicher Motors, and TVS Motor Company, said they will pass on the benefits of the GST rate cuts to consumers, spreading cheer before the festival season.

The GST rate cut will be effective from September 22.