Passenger vehicle sales quantity in India is expected to grow at a reasonable tempo of 4-7% in FY26 with most demand drivers remaining impartial or beneficial, in accordance to rankings company ICRA.
As for two-wheelers, ICRA mentioned it estimates the trade volumes to grow at a wholesome tempo of 6-9% in FY26, following an estimated 11-14% development in FY25.
Passenger vehicle (PV) trade volumes reached an all-time excessive of 4.2 million models in FY24. In year-to-date (YTD) FY25, wholesale volumes remained steady led by regular manufacturing by car producers however the trade quantity development has been modest at about 2% in opposition to the backdrop of waning substitute demand and excessive stock ranges, ICRA mentioned in an announcement.
“Healthy retail has helped moderate dealer inventory holding in the past few months. Nonetheless, the inventory continues to be moderately high,” it added.
“The industry’s growth in FY2025 is expected at 0-2%. Most of the demand drivers for the industry – disposable incomes, new model launches, cost of ownership etc. – remain neutral or favourable. Accordingly, even as the base for the industry continues to remain high, ICRA estimates the PV industry volumes to grow at a moderate pace of 4-7% in FY2026,” the rankings company mentioned.
In the two-wheeler (2W) trade, ICRA mentioned volumes witnessed sturdy development in the present fiscal at about 10% YoY development in YTD FY2025, with the trade persevering with to get better from decrease ranges throughout FY2020-FY2022.
The trade prospects over the previous few months have remained supported by improved rural demand after wholesome monsoon precipitation. “Rural demand for the industry is expected to remain healthy, with rabi sowing to date remaining healthy,” it famous.
“A reduction in income-tax outgo post changes in tax slabs in the Union Budget is likely to support an increase in disposable income and support demand. ICRA estimates the 2W industry volumes to grow at a healthy pace of 6-9% in FY2026, following an estimated 11-14% in FY2025,” ICRA mentioned.
As far because the home industrial vehicle (CV) trade is worried, it’s expected to register a marginal development in FY26.
“Factors like improvement in economic activities, continued budgetary support towards infrastructure spending, healthy freight availability further supporting freight rates, and regulations such as scrappage policy and push towards cleaner vehicles could drive replacement demand,” ICRA mentioned.
“Mandatory scrapping of older government vehicles and replacement demand would drive growth in buses, while growth in LCV (trucks) is expected to be lower, impacted by cannibalisation from e3Ws and a slowdown in e-commerce among other factors. M&HCV (trucks), LCVs and buses are estimated to grow by 0-3%, 3-5% and 8-10% respectively in FY2026,” it mentioned.
Published – February 27, 2025 03:49 pm IST
