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The initiatives announced in the Union Budget 2026 to strengthen India’s manufacturing base, along with existing policy tailwinds, are expected to deliver long-term benefits for the sector and support growth in the medium term
Photograph: Babu/Reuters
Key Points
- Maruti Suzuki led the segment in January with a dispatch of 174,529 units
- GST rate rationalisation led to companies cutting vehicle prices
- The price cuts led to record sales
Domestic passenger vehicle dispatches from companies to dealers rose 13 per cent year-on-year to 449,616 units in January with demand remaining robust owing to GST rate rationalisation and subsequent dip in prices, industry body SIAM said on Friday.
The overall passenger vehicle dispatches stood at 399,386 units in January 2025.
The sales growth last month was aided by utility vehicles.
The segment wholesales increased to 246,844 units last month as compared with 212,995 units in the year-ago period, a growth of 16 per cent.
Similarly, vans sales rose to 11,914 units in January as against 11,250 units in the same month last year.
Passenger car dispatches, however, declined 5 per cent year-on-year to 120,636 units in January.
Maruti Suzuki led the segment in January with a dispatch of 174,529 units.
The auto major sold 173,599 units in the year-ago period.
Two-wheeler sales rose 26 per cent to 19,25,603 units last month as against 15,26,218 units in January last year, the Society of Indian Automobile Manufacturers (SIAM) said in a statement.
Scooter dispatches increased 37 per cent year-on-year to 750,580 units while motorcycle wholesales rose 20 per cent year-on-year to 11,26,416 units in January.
Three-wheeler dispatches to dealers rose 30 per cent year-on-year to 75,725 units as against 58,167 units in the year-ago period, it added.
“Passenger vehicles, two-wheelers and three-wheelers posted their highest-ever sales of January in 2026, with double digit growth, compared to January 2025,” SIAM director general Rajesh Menon stated.
The new year has begun on a positive note, extending the strong momentum seen in the previous quarter, supported by sustained demand following the GST rate reduction, he added.
The initiatives announced in the Union Budget 2026 to strengthen India’s manufacturing base, along with existing policy tailwinds, are expected to deliver long-term benefits for the sector and support growth in the medium term, Menon added.
The GST Council approved limiting slabs to 5 per cent and 18 per cent effective from September 22 last year, the first day of Navaratri.
Under it petrol, LPG and CNG vehicles of less than 1,200 cc and not more than 4,000 mm length and diesel vehicles of up to 1,500 cc and 4,000 mm length have now moved to the 18 per cent rate.
Earlier, these two categories attracted 28 per cent GST with compensation cess of 1 per cent, and 28 per cent GST with 3 per cent compensation cess, respectively.
The GST rate rationalisation led to companies cutting vehicle prices.
The price cuts led to record sales in the ensuing festive period and the sales momentum has now been carried to the new year as well.
