New Delhi: Domestic passenger vehicle dispatches to dealerships registered a 16 percent year-on-year increase in March, reaching 4,42,460 units. The growth was driven by stronger demand and a build-up of inventory across dealer networks, according to figures released by the Society of Indian Automobile Manufacturers on Tuesday.

In comparison, passenger vehicle wholesales had stood at 3,81,358 units during the same month last year.

Two-wheelers see strong uptick

Dispatches in the two-wheeler segment also posted notable growth. Volumes rose by 19.3 percent to 19,76,128 units last month, up from 16,56,939 units recorded in the corresponding period a year earlier, the industry body said in a statement.

Three-wheeler segment expands

The three-wheeler category reported a similar upward trend, with dispatches climbing 21.4 percent year-on-year. Sales reached 76,273 units in March, compared to 62,813 units in March 2025.

February performance reflects positive momentum

Data from the Society of Indian Automobile Manufacturers also showed that domestic passenger vehicle dispatches from manufacturers to dealers had increased by 10.6 percent year-on-year in February, totalling 4,17,705 units. This performance indicated continued positive sentiment in the market.

Outlook remains positive but growth may slow

The broader outlook for the passenger vehicle segment continues to be favourable, although the pace of growth is expected to moderate in the coming periods.

An earlier report suggested that the industry is likely to achieve wholesale volume growth of around 7 to 9 per cent in FY26. This expansion is expected to be supported by strong festive demand, recent GST rate reductions, and a consistent pipeline of new model launches.

However, projections indicate that growth could ease to between 4 and 6 per cent in FY27, owing to a higher base and shifting macroeconomic conditions.

The report further highlighted ongoing structural changes within the sector. Utility vehicles now account for nearly 67 per cent of total passenger vehicle sales, underlining a continuing premiumisation trend.

At the same time, rising adoption of alternative fuel options, including CNG and electric vehicles, is contributing to a diversification in demand across the market.