Total vehicle sales in August rose by just 3.43% to 2,381,931 units as against 2,302,902 units in the year-ago period, Society of Indian Automobile Manufacturers (SIAM) data released on Tuesday shows.

Sales of passenger vehicles—which include cars, utility vehicles and vans—dropped by 2.46% to 287,186 units from 294,416 in the year-ago period. This was on account of high base effect in the year-ago period, low demand, and monsoon havoc in parts of the country.

“We expected a slowdown as last year the GST benefit was given. In September, the government revised its taxation, and the base was high. That is the reason we expected a dip this year. Of course, floods in Kerala and other parts of the country affected sales,” said Gaurav Vangaal, senior auto analyst at global consulting firm IHS Markit.

As per industry estimates, Kerala accounts for almost 8-10% of the overall market in India. “Almost 250,000 is the total Kerala market. Even if we lose 8%, that is around 20,000—which is huge,” Gaurav Vangaal explained.

Two-wheeler sales saw a marginal 2.91% growth. Sales were hit mainly due to policy changes in West Bengal where the state government had invoked in July a provision in the central motor vehicles rules which restricts sale of two-wheelers to non-licence holders.

“Some kind of effect of the government directive should have started coming. In September, we expect slow growth—lower than 5%. But after that, because of the festive season, it will resume,” Vangaal said.

Commercial vehicles registered a growth of 29.56% over the corresponding period last year.

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