On the back of sustained demand following the GST cut in September, passenger vehicle dispatches into the domestic market during February are estimated to be around 4.3-4.5 lakh units, according to industry sources.

This would translate into 13-18% year-on-year growth, setting a new record for February. It would also mark the fifth straight month of double-digit growth in passenger vehicle dispatches, driving the fastest second-half expansion in several years.

In February 2025, domestic passenger vehicle wholesales stood at 3.80 lakh units. Senior executives from OEMs are looking at 15-18% growth, with volumes in the range of 4.4-4.5 lakh units in February, while brokerage Nomura has forecast 12% growth. Dispatches were at 4.50 lakh units in January as well, with growth of around 12.6%.

“Feb-26 wholesales shall be robust, with double-digit YoY growth across segments. Sales volumes are likely to be driven by continued positive customer sentiment spurred by better affordability, new products, adequate finance availability and inventory build-up with dealers,” said Raghunandan NL from Nuvama.

Registration data from the Vahaan portal shows that passenger vehicle registrations in February grew at a stronger rate of close to 25%. Earlier this month, dealers said sentiment remains firmly constructive, supported by favourable macroeconomic conditions and improving on-ground confidence, with 72.56% expecting growth across vehicle segments. The Budget-led thrust on infrastructure and agriculture, continued wedding and festival demand, and RBI rate stability following 2025’s easing have together improved affordability, financing comfort and purchase intent.

Nomura noted that its industry survey suggests underlying demand remains healthy, with waiting periods largely normalised across most models, except select new launches such as the XUV 7X0, Venue and Sierra. “Inventory levels are comfortable, and competitive intensity has increased, with a moderate increase in discounting visible across models, including on newer models such as the Maruti Victoris,” the brokerage said.

India’s largest carmaker, Maruti Suzuki, has said demand for small cars remains robust following the GST 2.0 reform, but production constraints are limiting dispatches. Maruti Suzuki’s bookings grew by almost 25% in January, and it had close to 1.75 lakh pending bookings at the start of February, with actual stock available at dealerships at around three days.

Passenger vehicle demand remained subdued in the first half of the financial year, with volumes declining in most months. However, GST 2.0, which was implemented towards the end of September, gave a significant boost to the industry. Initially, the outlook for full-year growth was in low single digits, but it was revised to high single digits after the GST cut.

Jay Kale from Elara Securities noted that demand has held up well post-GST and post-festive as well, and the strong momentum is expected to continue in March, with a few festive dates.