Auto sales up 18% in Jan on strong rural demand

New Delhi: Vehicle registrations, a proxy for retail sales, increased 18% from a year earlier in January to 2.72 million units thanks to sustained demand after tax cuts last year and improved cash flows in rural markets.Passenger vehicle sales rose by 7.2% to cross the half million mark in registrations last month, two-wheeler and commercial vehicle registrations grew by 21% and 15%, respectively, showed data collated by the Federation of Automobile Dealers Association (Fada) from the government's Vahan portal. Tractor sales rose 23% in January. Demand for construction equipment though continued to remain under pressure, declining by 21% on a high base.Auto sales had remained modest for most of calendar 2025, prior to the cuts in goods and services tax (GST) with effect from September 22. This led to a drop in vehicle prices, sparking a sales spurt.128172478 "January has delivered a strong, broad-based start to the calendar year," said CS Vigneshwar, president, Fada. "The growth was powered by continued post-GST momentum, healthy rural cash flows on the back of harvest and weddings, and sustained demand visibility across mobility and freight."Total vehicle registrations were supported by robust two-wheeler sales. While sales in rural areas climbed 20% last month, urban sales rose by 22%. Rural markets contributed as much as 56% of two-wheeler sales in January, supported by Pongal/Makar Sankranti festivals, marriage-season footfalls, and better affordability."We are also seeing a clear revival in urban markets-a healthy signal of demand normalisation beyond festive-only buying," said Vigneshwar. "Dealer feedback points to strong enquiry momentum driven by sharper customer engagement, quicker digital follow-ups, and a visible shift towards higher-value and mid-powered motorcycles."CV sales remained strong, indicating improving freight sentiment and replacement-led buying. The uptrend is visible across tonnage bands, with light commercial vehicle sales growing by 15% to 65,505 units, and heavy commercial vehicle by 15% to 34,287 units.

from Economic Times https://ift.tt/JRy4GAi

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