Core Insights - India's Light Vehicle (LV) wholesale figures rose by 9% month-on-month (MoM) in July, reaching 398k units, with a modest year-on-year (YoY) increase of 2% [1] Wholesale and Retail Sales - The total LV sales comprised 339k Passenger Vehicles (PVs) and 59k Light Commercial Vehicles (LCVs), with PV volumes increasing by 8% MoM and 1% YoY, while LCV sales surged by 13% MoM and 8% YoY [2] - Retail sales of PVs and LCVs also saw a 9% MoM increase to 374k units in July, up from 342k units in June and 347k units in May, with PV retail sales growing by 10% MoM [4] - LCV retail sales increased by 3% MoM, contributing to a total of 2.9 million LV sales in the first seven months of 2025, reflecting a 1% YoY increase [5] Market Dynamics - Demand in rural areas significantly bolstered sales despite lackluster urban market performance, aiding recovery from the MoM decline in June [3] - PV inventory levels remained stable at 55 days at the end of July, indicating balanced supply and demand [4] Tax Policy Impact - The government's decision to reduce the Goods and Services Tax (GST) from 28% to 18% on vehicles shorter than four meters is expected to stimulate sales of Mini Cars, Sub-Compact Cars, and Sub-Compact SUVs [6] - Larger vehicles will now be taxed at a flat rate of 40%, down from a previous higher rate of about 50% [6] - The tax reductions will take effect on September 22, coinciding with the peak festival period, traditionally a favorable time for vehicle purchases [7] Future Projections - The forecast for India's LV wholesales remains unchanged, with a conservative 1% YoY increase anticipated to 5 million units this year, including a 1% YoY rise in PV sales and a 3% YoY expansion in LCV sales [7] - There is potential for upward revision of this projection in the next report, reflecting the expected sales boost from the upcoming GST rate reduction [8]