March 13 (Reuters) - India's domestic car dispatches to dealers rose for the fifth straight month in February, data from an industry body showed on Friday, helped by tax cuts that have lowered prices across most models.
"While the month of March has festive drivers... the recent conflict in West Asia remains a concern... could impact the manufacturing processes and exports," Rajesh Menon, Director General of Society of Indian Automobile Manufacturers (SIAM), said.
Here are some key details:
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Passenger vehicle dispatches jumped 10.6% to 417,705 units in February, compared with 377,689 units a year earlier.
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Tax reductions continue to fuel growth, extending momentum for fifth consecutive month.
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In September 2025, India slashed taxes on larger SUVs to 40% as an additional levy was dropped and on small cars and two-wheelers to 18% from 28%, helping support demand across segments.
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Vehicle sales picked up during the ongoing wedding season, supported by strong bookings, inventory build-up and new model launches.
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Domestic demand is expected to remain strong, though exports could soften on reduced shipments to Africa and the Middle East, analysts added.
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SIAM warns the ongoing Middle East crisis could hit production and exports if supply chains are disrupted.
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A shortage of gas - crucial for paint shops and component manufacturing - may affect production, analysts said, though they expect only near-term impact on Indian manufacturers due to inventory buffers.
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Domestic demand to stay robust but exports could weaken due to reduced shipments to Africa and the Middle East- Axis Capital
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India, the world's third-biggest car market, has an auto industry that accounts for 7.1% of its GDP.
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Tax cut-driven growth is likely to sustain for several quarters, a dealer's body said last week.
Reporting by Meenakshi Maidas and Urvi Dugar in Bengaluru
Source: Reuters