The Indian automobile industry witnessed contrasting trends in August, with passenger vehicle sales slipping as customers await the Goods and Services Tax (GST) reform's benefits that are scheduled to be effective from September 22, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday.

Meanwhile, the two-wheeler and three-wheeler segments continued to expand last month.

Passenger vehicle wholesales declined 8.8 per cent year-on-year to 3,21,840 units, compared with 3,52,921 units in August 2024.

Sales dipped as customers postponed purchases in anticipation of the GST rate cut and subsequent reduction in vehicle prices, SIAM Director General Rajesh Menon said.

In contrast, the two-wheeler market recorded a steady increase. Dispatches rose 7 per cent to 18,33,921 units from 17,11,662 units a year ago. Within the segment, scooter sales grew 13 per cent to 6,83,397 units, while motorcycle dispatches climbed 4 per cent to 11,06,638 units

The three-wheeler category emerged as the strongest performer, reporting its highest-ever August sales at 75,759 units, up 8.3 per cent from 69,962 units in the same month last year.

The rise was driven largely by passenger and goods carriers.

However, within the segment, e-rickshaw sales plunged 49.4 per cent to 1,344 units, even as e-cart volumes surged 362.9 per cent to 810 units.

Looking ahead, industry stakeholders expect sales momentum to improve with the implementation of GST 2.0. Petrol and diesel cars with engine capacities up to 1,200 cc and 1,500 cc will attract 18 per cent GST, while larger vehicles will be taxed at the highest 40 per cent slab.

Major automakers, including Tata Motors, Mahindra and Mahindra, Hyundai and others, have announced to pass on the full benefits of the rate to customers.

Meanwhile, the overall passenger vehicle production, three-wheelers, two-wheelers, and quadricycles during August remained resilient, considering the upcoming festive season and GST rationalisation.