India’s biggest carmaker, Maruti Suzuki India Ltd, and the country’s top sports utility vehicle (SUV) maker in revenue terms, Mahindra & Mahindra (M&M), recorded a rise in retail sales in August even as the announcement of Goods and Services Tax (GST) rate rationalisation weighed on the broader industry as car buyers delayed their purchases to take benefit of lower prices.

Retail sales of Maruti Suzuki rose by a modest 0.6% year-on-year to 1.27 lakh units in August, while M&M witnessed a 7% jump, recording sales of 43,732 units last month, according to data released by the Federation of Automobile Dealers Associations (FADA).

With strong retail sales in August, M&M dislodged Hyundai Motor India to become the second-biggest carmaker in India. Sales of Hyundai declined 2.8% year-on-year to 42,226 units in August from 43,438 units in the same month last year.

Retail sales of Tata Motors dropped 4% year-on-year to 38,286 units in August 2025 compared with 39,864 units in the corresponding month last year.

Japanese automaker Toyota Kirloskar Motor recorded 5.8% growth in retail sales in August, aided by sales of cross-badged models it gets from Maruti Suzuki.

Passenger vehicle sales grew by a modest 0.9% year-on-year to 3.23 lakh units in August 2025 compared with 3.20 lakh units in August 2024.

The landmark announcement made by Prime Minister Narendra Modi from the Red Fort has only strengthened buyer optimism, with many families preferring to align their purchases with the forthcoming reduced GST rates, said FADA president C S Vigneshwar. 

This has not dampened demand but merely deferred a part of it to September, when festive deliveries and conversions gather full momentum, Vigneshwar added.

After sluggish growth in the first half of this year, FADA remains confident that September will herald the beginning of an accelerated growth cycle, powered by both policy tailwinds and festive fervour.

Over the weekend, several carmakers such as Hyundai Motor India, M&M, and Tata Motors, among others, slashed car prices following the GST rate rationalisation.

Two-wheeler sales also showed resilience in August despite the GST cut announcement. Retail sales of two-wheelers grew 2% year-on-year to 13.73 lakh units last month.

Enquiries remained strong, fuelled by the onset of festivals such as Onam and Ganesh Chaturthi, with many customers keen on auspicious-day deliveries, said FADA’s Vigneshwar. However, excessive rains and floods in north India disrupted rural mobility, while erratic supply of popular scooter models constrained conversions, he added. “The landmark GST 2.0 announcement also led to buyers deferring purchases to September in anticipation of lower rates.”

Honda Motorcycle and Scooter India emerged as the country’s largest two-wheeler maker in August, overtaking long-standing market leader Hero MotoCorp. In August 2025, Hero MotoCorp’s retail sales fell 5% year-on-year to 3.41 lakh units, according to FADA data. In comparison, Honda’s two-wheeler sales rose marginally by 0.1% year-on-year to 3.54 lakh units, making it India’s highest-selling two-wheeler manufacturer.