Car sales jump 36% in August, companies gear up for festive boom

New Delhi: Passenger vehicle sales in India grew in strong double-digits in August, albeit on a low base, as automakers expedited factory dispatches to build dealer inventory, anticipating strong demand in the coming festive season. As many as 448,319 cars, SUVs, and vans were sold last month, a 36% rise from 330,259 units a year ago, according to industry estimates.

Car sales had fallen for the fourth straight month by 9% year-on-year in August 2025 with carmakers calibrating dispatches ahead of the announcement of revised goods and services tax (GST) rates. Prime Minister Narendra Modi had announced a rationalisation of tax rates in his Independence Day Speech last year, which came into effect on September 22, 2025.

Market leader Maruti Suzuki sold 176,971 vehicles in August, up 35% from a year earlier. Partho Banerjee, senior executive officer, marketing and sales, termed it as the company's best-ever sales for the month of August.

"There are three tailwinds supporting demand," he said. "Firstly, the GST cuts which brought down the cost of vehicles. Interest rates continue to remain low, resulting in lower EMIs. Finally, the rejig in income tax slabs in budget last year has put more money in hands of customers. All these factors together are boosting volumes."

Maruti Suzuki, which is accelerating capacity expansions across its plants in Gujarat and Haryana, said demand remained strong across categories. Banerjee said the company currently has pending bookings for 180,000 cars and network stock of 16 days.

He expects the strong momentum to continue in the coming festive season though the growth rate may temper, on a high base. "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."

Tata Motors Passenger Vehicles and Mahindra & Mahindra (M&M) too reported strong sales, growing volumes by 59% and 50%, respectively, in August.

"Demand continues to remain strong across our portfolio, with the updated Scorpio-N and BE 6 SPORTEQ receiving strong market response from customers," said Velusamy R, president, automotive business at M&M. "We look forward to building on this momentum during the festive season."

Sales at the local unit of South Korea's Hyundai Motor India (HMIL) grew 24% last month. Tarun Garg, MD & CEO, HMIL, said domestic sales of 54,396 units was the highest-ever for the month of August. In the two-wheeler segment too, demand remained robust. While Honda Motorcycle and Scooter India recorded 8% sales growth at 517,329 units, TVS Motor Company posted an 18% increase at 433,796 units. Local motorcycle sales at Bajaj Auto increased 10% to 201,898 units in August. At the premium end of the market too, Royal Enfield clocked 11% sales growth to 114,204 units.

In CVs, sales at Tata Motors rose 33% to 36,619 units, while Chennai-based Ashok Leyland reported a 43% rise at 19,438 units.