The strong growth, however, came on a low base as automobile sales were sluggish last year in the run-up to the overhaul in goods and services tax (GST) rates with effect from September 22, 2025. Automakers dropped prices to pass on the lower GST rates, triggering a sales surge.
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Two-wheeler sales grew 28% year-on-year last month, per data collated by the Federation of Automobile Dealers Associations (Fada) from the road ministry’s Vahan portal. Sales of three-wheelers, passenger vehicles, and commercial vehicles climbed 16%, 19% and 24%, respectively in July. “For the first time on record, every single category posted its best-ever July, with two-wheelers, three-wheelers, commercial vehicles, passenger vehicles, tractors all at all-time July highs,” said Sai Giridhar, vice-president at Fada.
ET Bureau
Dealers attributed the robust sales momentum to GST 2.0-led affordability, easier availability of retail finance, and favourable festival timing. Rural markets outperformed urban centres across segments. While two-wheeler sales in rural markets increased 29% last month, urban centres grew by 28%. The share of electrics in total two-wheeler sales touched a record 11.2% last month, up from 7.7% a year earlier.
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In the commercial vehicle segment too, rural markets again led decisively, growing by 29% against 19% in urban centres. Dealers said cement, steel, and mining-linked movement, ecommerce logistics and improving finance availability boosted sales, even as demand for school buses tapered. The share of electrics in the CV segment at 3.57% marked another all-time high against 1.65% a year ago. Passenger vehicle sales in rural markets accelerated 25% in July, ahead of a 16% rise in urban areas, backed by improved affordability, new launches and marketing schemes from automakers. Meanwhile, consumer hesitation around the E20 petrol transition nudged buyers towards CNG, hybrids, and EVs, according to Fada.