Passenger vehicle dispatches up 13% on GST reforms, price cut

NEW DELHI: Domestic passenger vehicle (PV) dispatches from companies to dealers rose 13% year-on-year to 4,49,616 units in Jan, with demand remaining robust, owing to GST rate rationalisation and subsequent dip in prices, industry body Society of Indian Automobile Manufacturers (Siam) said on Friday.

The sales growth last month was aided by utility vehicles. The segment wholesales increased to 2.5 lakh units last month as compared with 2.1 lakh units in year-ago period, showing a growth of 16%. Van sales rose to 11,914 units in Jan as against 11,250 units in the same month last year. Passenger car dispatches, however, declined 5% year-on-year to 1.2 lakh units in Jan.

Maruti Suzuki led the PV segment in Jan, with a dispatch of 1.7 lakh units. Two-wheeler sales rose 26% to 19.3 lakh units last month as against 15.3 lakh units in Jan last year, the Siam said .

"Passenger vehicles, two-wheelers and three-wheelers posted their highest-ever sales of Jan in 2026, with double digit growth, compared to Jan 2025," Siam DG 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% and 18% effective from Sept 22 last year, the first day of Navaratri.

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. agencies