Cars and two-wheelers are keeping pace in February with GST tailwinds

Sales of cars and two-wheelers – counted as factory shipments – rose at a rapid pace for most manufacturers in February from a year earlier. It was the fifth consecutive month of sales growth after the government reduced the Goods and Services Tax (GST), making cars more affordable across segments.Growth in February was led by homegrown Tata Motors and Mahindra & Mahindra, monthly sales data released by individual carmakers on Sunday showed. Overall, the industry is estimated to have shipped 4,20,000 to 4,25,000 units in February, compared to 3,81,665 units a year ago, reflecting healthy double-digit growth.

Market leader Maruti Suzuki last month reported domestic sales of 1,61,000 passenger vehicles, a marginal increase from 1,60,791 units a year earlier. Partho Banerjee, senior executive officer, sales and marketing, said the company is operating its plants at more than 100% of estimated annual production capacity of 2.4 million units or about 200,000 cars per month to meet sustained demand.

Total sales, including exports, reached 214,000 units in February, a record for the month, even as dealer network inventory remained lean at around 12 days. A new production line is expected to come online in Kharkhoda, Haryana, in April, which should help ease supply constraints in the coming months.Tata Motors posted a 34% year-on-year increase in domestic sales to 62,329 units, helped by strong demand for its SUVs and electric vehicles.

Mahindra & Mahindra continued its momentum with a 19% increase in domestic sales to 60,018 units, driven by robust bookings for its commercial vehicles.

Among multinational automakers, Hyundai Motor India recorded domestic sales of 52,407 units, up 9.8% year-on-year, marking the highest ever February in India. The Korean automaker’s exports also rose to 13,727 units, up 25% year-on-year. Toyota Kirloskar Motor reported a 16% increase in domestic shipments to 30,737 units, benefiting from continued demand for hybrid models.

Kia India recorded domestic sales of 27,610 units, a growth of 10% from the same month a year ago, supported by growth in the compact and mid-SUV segment.

Industry executives said rural recovery, continued preference for SUVs and improved supply conditions supported demand in February, with competition expected to increase further in the new fiscal year.

According to ratings agency Icra, auto sales will rise 5-7% in FY26 due to GST-led price cuts, stable demand for replacements and continued trend of personal car usage.

Sales of two-wheelers also rose rapidly. Market leader Hero MotoCorp shipped 558,216 units this month, up 44% from 357,296 units in the same period last year. TVS and Royal Enfield also made gains. While TVS sales grew 13% to 365,471 units, Royal Enfield sales rose 13% year-on-year to 91,248 units.