PV sales surge 36.4% to 4.5 lakh units in August as GST 2.0, lower EMIs drive demand

Passenger vehicle (PV) sales rose sharply by around 36.4% Year-on-Year (YoY) to 4.5 lakh units in August 2026, compared with around 3.3 lakh units in the same month last year, as lower GST rates, reduced borrowing costs and revised income-tax rates helped improve vehicle affordability and consumer sentiment.

Industry players attributed the strong growth to a combination of policy and macroeconomic factors. The implementation of GST 2.0 has reduced the tax burden on several passenger vehicle categories, while successive reductions in the repo rate have lowered financing costs and, in turn, Equated Monthly Instalments (EMIs) for vehicle buyers.

Low base lifts August growth

The sharp year-on-year increase was partly amplified by a low base. PV volumes in August 2025 had been hit in the second half of the month amid uncertainty surrounding a potential GST rate cut, bringing industry sales down to around 3.3 lakh units.

“Industry is expected to be around 4.5 lakhs plus-minus maybe 2,000 to 3,000 units in August this year... Last year, the number was around 3.3 lakh units,” Maruti Suzuki India Senior Executive Officer, Marketing & Sales, Partho Banerjee, told reporters during a conference call.

August volumes were marginally below the roughly 4.6 lakh units recorded in July, with the sequential decline partly reflecting three fewer working days in August.

Banerjee identified three key tailwinds supporting the industry: “One is the GST 2.0, other is the repo rate reduction, which led to the reduction in the EMI, and the third thing was the income tax exemption (on incomes up to Rs 12 lakh).”

Major automakers report broad-based growth

The industry-wide momentum was reflected in the performance of major automakers. Maruti Suzuki, the market leader, reported domestic PV sales of 1,76,971 units, up 34.8% YoY from 1,31,278 units in August 2025.

Maruti ended August with pending bookings of nearly 1.8 lakh units, Banerjee said, with the newly launched Brezza alone accounting for around 30,000 bookings.

Tata Motors Passenger Vehicles recorded domestic sales of 65,253 units, a 59% YoY increase from 41,001 units. Its overall EV sales, including international business, rose 94% to 16,549 units.

Mahindra & Mahindra reported a 50% increase in domestic passenger vehicle sales to 59,257 units, compared with 39,399 units a year earlier.

Hyundai Motor India’s domestic sales rose 23.6% to 54,396 units, its highest-ever August sales. Kia India also posted its best-ever August wholesales since inception, with volumes rising 48.1% to 29,042 units.

“Our strong performance in August reflects the continued trust of our customers and the relevance of our evolving product portfolio,” said Kia India Senior Vice President, Sales & Marketing, Atul Sood.

JSW MG Motor India reported an 14% YoY increase in wholesales to 7,508 units, while Nissan Motor India posted a 147.5% rise to 3,426 units, from 1,384 units a year earlier.

Festive season key to sustaining momentum

With the industry entering the crucial festive season, automakers remain optimistic about demand. Banerjee said the favourable environment was likely to continue, although growth rates could moderate in the second half of FY27 as comparisons become tougher.

“So far, I think we are having good tailwinds. We don't see any headwinds there,” he said.

Maruti expects the domestic PV industry to grow by at least 10% in FY27, compared with its earlier forecast of 4%-6%. Banerjee said the company stood by the 10% outlook, while acknowledging that the growth rate in the second half would not match the pace seen in the first half.

“Overall, I think the industry should grow by at least 10% in this financial year,” he said.

The combination of GST relief, lower EMIs, higher disposable income and festive demand is expected to keep PV volumes elevated, although the strength of growth will increasingly be tested as the industry moves beyond the favourable low base of the previous year.