New Delhi, Feb 20 (IANS) Passenger vehicle retail sales rose 7 per cent in January (year-on-year) in India, while wholesale volumes rose 12 per cent to 4.5 lakh units, a report said on Friday.

The report from ICRA said wholesale dispatches grew 14 per cent sequentially over December 2025, even as original equipment manufacturers (OEMs) ramped up production to cater to robust domestic demand.

ICRA forecasts passenger vehicle wholesale volumes to expand 5–7 per cent in FY26, supported by sustained demand momentum, GST cuts and continued new model launches.

“Domestic automobile demand recorded strong growth across both two-wheeler (2W) and passenger vehicle (PV) segments in January 2026, supported by sustained demand momentum, GST rate cuts, wedding season demand and new model launches,” the report said.

The 14 per cent sequential growth in wholesale volumes in January was posted despite production curbs for annual maintenance. Retail sales were supported by the winter wedding season, new model launches and revised GST rates.

Overall PV wholesale growth in the 10‑month of FY26 period stood at 6.7 per cent while retail volumes grew 8 per cent.

The domestic automobile sector is expected to maintain steady growth momentum through FY2026, supported by policy measures to strengthen domestic manufacturing, improving affordability following GST rationalisation, recovery in consumption and sustained rural income levels after a normal monsoon.

Meanwhile domestic two-wheeler wholesale volumes grew 25 per cent YoY, reaching 1.8 million units, while wholesale volumes recorded 6.7 per cent growth during 10 months of FY2026 (April–January).

Retail sales grew 20.8 per cent YoY in January, aided by Pongal or Makar Sankranti demand, wedding season footfalls and improving affordability, the report noted.

The report estimates two-wheeler domestic volumes to grow 6–9 per cent YoY in FY26, aided by improved replacement demand after GST rate cuts, gradual recovery in urban consumption and healthy rural incomes.

Electric two-wheeler retail volumes touched 1,23,012 units in January, up 25.3 per cent YoY.

—IANS

aar/na