Ahmedabad: The sharp growth momentum in passenger vehicle sales slowed in January 2026 following the GST reductions announced in September 2025, as supply chain disruptions and extended waiting periods weighed on the market. Data from the Federation of Automobile Dealers’ Association (FADA) Gujarat showed that passenger vehicle sales in the state stood at around 40,156 units during the month, registering only about 1.6% year-on-year growth.

In contrast, two-wheeler dealers witnessed strong demand, with retail sales rising nearly 37% to about 1.34 lakh units. Overall vehicle sales in Gujarat, including tractors, three-wheelers and commercial vehicles, rose by roughly 26.9% year-on-year to nearly 2.09 lakh units, indicating broad-based recovery across segments.

Dealers attributed the improvement largely to GST rationalisation, which boosted affordability, especially for entry-level and commuter models, reviving demand in both urban and rural markets. However, supply constraints continued to influence deliveries. Waiting periods for many mass-market cars have stabilised, but compact SUVs still carry queues of up to a month, while some premium and luxury SUVs face waiting times of three to six months due to persistent demand and limited supply, said Jigar Vyas, CEO of an Ahmedabad-based dealership. He added that the crowded SUV segment and frequent model launches could keep pricing pressure and margins tight for manufacturers in the near term.

Industry observers noted that the moderation in car sales is typical after the calendar year-end, when buyers often postpone purchases in anticipation of new launches or updated variants. FADA Gujarat Chairperson Pranav Shah said car sales remained largely flat post year-end but expressed confidence of double-digit expansion across segments in the current financial year. He highlighted that the post-GST environment has particularly accelerated two-wheeler demand, given the segment’s price sensitivity, while improving rural traction is contributing significantly to overall retail growth.

Officials from the Regional Transport Office indicated that uncertainty over revised vehicle prices and expectations tied to the Union Budget also delayed purchase decisions, lengthening waiting periods in select SUV and sedan categories. Rural demand, typically subdued in January, was further affected this year by adverse weather and uncertainty over crop output, though sales are expected to improve by March as harvest prospects become clearer.