India's top carmakers reported lower sales to dealers for a fourth straight month in August amid weak demand, with SUV maker Mahindra & Mahindra scaling down its dispatches ahead of a government decision on lower consumption tax.
Maruti Suzuki, Mahindra & Mahindra, Hyundai Motor India and Tata Motors are India's four largest carmakers, cornering 80% of sales. Their combined sales dropped 8.7% in August.
Analysts at Nomura said automotive dealers stocked up conservatively for August ahead of the key tax cut decision, as buyers delay festive season purchases expecting lower prices.
Prime Minister Narendra Modi had announced sweeping tax reforms, including tax cuts on small cars, effective from October, with India's goods and services tax (GST) council meeting later this week to discuss the matter.
Mahindra's sports utility vehicle sales fell 9% in August, falling for the first time since January 2022. They are still up 15% so far in the fiscal year to March 2026.
The drop relegated Mahindra to the no. 4 spot, allowing Hyundai's Indian unit to return to its long-held no. 2 spot. Mahindra had held the no. 2 spot for the last four months.
Hyundai reported a sales decline of 11%. Tata Motors' car sales dropped 7%, cushioned slightly by a jump in electric vehicle sales to a record 8,540 units.
Meanwhile, market leader Maruti Suzuki reported an 8% decline in sales, hurt by lower sales volumes of entry-level small cars. Sales of utility vehicles, including SUVs and multi-seater vehicles, fell for a third-straight month.
Small cars and two-wheelers are likely to see the biggest benefit, with the tax rate expected to drop to 18% from 28%, Reuters reported last month, citing a government source.
Auto stocks closed nearly 3% higher, hitting their highest levels since last October, on strong two-wheeler sales and hopes of tax cuts.
Eicher Motors reported a 57% surge in domestic sales in its Royal Enfield stable and TVS Motor logged a 28% growth.
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