The domestic passenger vehicle (PV) industry is expected to post a modest wholesale volume growth of 1 to 4 per cent in the current financial year, according to a report released by credit rating agency ICRA. This projection follows a contraction of 1.1 per cent in the first four months (April–July) of the fiscal, with elevated inventory levels and a high base weighing on overall momentum.Despite these headwinds, demand could be supported by the steady rollout of new models from original equipment manufacturers (OEMs), as well as the potential implementation of proposed Goods and Services Tax (GST) reforms. The central government has suggested reducing the current four GST slabs—5, 12, 18, and 28 per cent—to just two: 5 and 18 per cent. If enacted, this simplification could improve price competitiveness in select vehicle segments.OEMs are set to report August sales on 1 September. For July, wholesale dispatches grew 8.9 per cent sequentially as manufacturers built up inventory in anticipation of the festive season. However, year-on-year growth remained flat at Rs 3.4 lakh units. Retail sales also improved sequentially by 10.4 per cent, though they dipped slightly by 0.8 per cent compared to July last year.Utility vehicles, particularly SUVs, continued to lead the market, contributing 65 to 66 per cent of overall PV sales. These are expected to remain the primary growth drivers in the near term.The Federation of Automobile Dealers Associations (FADA) reported that average inventory levels rose to 55 days by the end of July, further underscoring the supply-side buildup ahead of anticipated festive demand.Meanwhile, exports showed a positive trend, registering a 9 per cent year-on-year increase in July. This growth was primarily led by Maruti Suzuki India, followed by Hyundai Motor India, though the performance came off a low base.Overall, while near-term growth in the domestic PV industry may remain subdued due to elevated stocks and last year’s strong performance, factors such as new model introductions and potential tax reforms may provide a much-needed boost in the second half of the year.