New Delhi : India passenger vehicle sales are expected to see moderate growth in FY2026, as analysts project a cautiously optimistic outlook for both commercial and passenger vehicle segments amid GST rate reductions.
In August, wholesale volumes of commercial vehicles grew 6 per cent year-on-year (YoY), while retail volumes rose by 3.2 per cent, according to a report from ratings agency ICRA.
Fleet operators deferred purchases in anticipation of GST reductions, which caused only modest growth in wholesale volumes—1.3 per cent during the first five months of FY2026.
ICRA projects passenger vehicle volumes to increase 1 to 4 per cent in FY2026, driven by new model launches and policy relief measures.
Retail sales of light commercial vehicles rose 8.2 per cent in August and 0.8 per cent sequentially. However, the LCV truck segment faces headwinds due to rising preference for pre-owned vehicles and competition from electric three-wheelers, the report noted.
Medium and heavy commercial vehicle (M&HCV) sales grew a robust 9.2 per cent YoY, despite demand disruptions caused by prolonged monsoons.
The bus segment should grow 8 to 10 per cent, buoyed by replacement demand.
Passenger vehicle sales fell in August compared to both the previous month and the same period last year, as buyers postponed purchases awaiting potential GST reductions.
Passenger vehicle exports rose 25 per cent in August and 15 per cent during the first five months of FY2026.
SUVs continued to dominate, representing 65 to 66 per cent of total passenger vehicle volumes.
ICRA added that the overall economic environment, a resurgence in construction and mining, and sustained festive-season demand should support sales across automobile segments.
–IANS
