Indian Auto Industry Reports Strong January Sales with 13% Growth
Domestic passenger vehicle (PV) dispatches from manufacturers to dealers in India witnessed a significant uptick in January, rising by 13% year-on-year to reach 4,49,616 units. This robust performance is largely attributed to the recent GST rate rationalisation, which led to price reductions and sustained consumer demand, as highlighted by the Society of Indian Automobile Manufacturers (Siam) in its latest report released on Friday.
Segment-Wise Performance Highlights
The sales growth last month was primarily driven by the utility vehicle segment, which saw wholesales increase to 2.5 lakh units, up from 2.1 lakh units in the same period last year, marking a growth of 16%. Van sales also showed positive momentum, rising to 11,914 units in January compared to 11,250 units in January of the previous year. However, passenger car dispatches experienced a slight decline, falling by 5% year-on-year to 1.2 lakh units in January.
Maruti Suzuki continued to lead the PV segment, dispatching 1.7 lakh units in January. In the two-wheeler category, sales surged by 26% to 19.3 lakh units last month, up from 15.3 lakh units in January last year, according to Siam data.
Record Sales and Policy Impact
Rajesh Menon, Director General of Siam, stated, "Passenger vehicles, two-wheelers, and three-wheelers posted their highest-ever sales for January in 2026, with double-digit growth compared to January 2025." He added that the new year has begun on a positive note, extending the strong momentum observed in the previous quarter, supported by sustained demand following the GST rate reduction.
The GST Council's decision to limit slabs to 5% and 18%, effective from September 22 last year, the first day of Navaratri, led to companies cutting vehicle prices. These price reductions resulted in record sales during the ensuing festive period, and the sales momentum has now carried over into the new year as well.
Future Outlook and Government Initiatives
Menon further emphasised that 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. This optimistic outlook underscores the automotive industry's resilience and potential for continued expansion, driven by favourable economic policies and consumer confidence.
