Car sales jump over 30% in August as festive demand builds

Car sales rose more than a third in August as manufacturers ramped up dealer dispatches to build stocks for the festive season amid expectations the buoyant demand momentum will sustain.

As many as 439,309 passenger cars, sedans and utility vehicles were sold last month, rising 36.5% from a year earlier, showed data from industry body Society of Indian Automobile Manufacturers (SIAM).

Car sales had fallen 9% in August--the fourth straight month of decline--as companies controlled dispatches ahead of the announcement of reduced goods and services tax (GST) rates. This followed Prime Minister Narendra Modi announcing a rationalisation of GST rates in his I-Day Speech last year, which came into effect September 22.


While three-wheeler sales rose 23% to 93,764 units in August, those of two-wheelers grew 10.5% to more than 2.03 million units.

Two-wheeler sales were largely driven by scooters whose volumes grew by 24% to 855,715 units. Motorcycle sales rose 2.4%, albeit on a larger base, to more than 1.13 million units last month.

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Notably, the month marked the highest-ever sales of passenger vehicles, three-wheelers and two-wheelers for August.

“India’s automobile industry is passing through a robust growth phase,” said Rajesh Menon, director general, SIAM. “The growth in August 2026 has been supported by a lower base of previous year.”

Menon said the broader demand environment remained fundamentally healthy, helping drive automobile sales.

“Strong consumer confidence, resilient rural markets, improving financing conditions, and accelerating adoption of alternative drivetrains are creating a favourable ecosystem across vehicle categories,” he said.

Festive demand is also expected to give an additional boost, resulting in healthy September quarter performance, Menon said.

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Partho Banerjee, senior executive officer, marketing and sales at Maruti Suzuki agreed the strong demand momentum will continue this festive season though the growth rate may ease.

“The industry is doing about 450,000 units per month,” he said. “The growth rate will moderate on a high base in the second half. But there is no reason why volumes will come down in absolute terms.”

Hyundai Motor India, preparing to introduce a new midsize SUV in October, is also confident of a healthy uptick in sales in the coming months.

“Very rarely you see such strong demand in the market,” Tarun Garg, managing director, said in an interaction earlier this month. “Industry growth is expected to taper off and close at about 5-6% in the second half of the fiscal, on a high base. We expect to grow faster than the market with our two new launches.”

Hyundai is advancing the commissioning of a third shift at its factory in Talegaon, Maharashtra, to meet growing demand.