NewKerala.com

India's Auto Industry Set for Robust Growth in 2026 Across All Segments

India's automobile industry is poised for sustained momentum in 2026, with an optimistic outlook from Axis Securities. Growth is expected across all segments, including two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors. Key drivers include policy support like potential GST reductions, a recovery in rural demand, and improving consumer affordability. The report highlights strong performance in 2025, particularly in the three-wheeler and tractor segments, setting a positive foundation for the coming year.

Key Points: India Auto Industry 2026 Outlook: Optimistic Growth Forecast

  • Strong 2W & 3W Growth
  • Policy & GST Tailwinds
  • Rural Demand Recovery
  • Broad-Based Segment Expansion
2 min read

Auto Industry outlook 2026 remains optimistic; growth seen across 2W, 3W, PV, CV and tractor segments: Report

Axis Securities report forecasts sustained growth for India's auto sector in 2026, driven by policy support, rural recovery, and demand across all vehicle segments.

"The overall industry outlook remains optimistic, with gradual demand recovery, a reduction in the GST rate, and income tax relief as key factors driving demand in FY26. - Axis Securities Report"

New Delhi, January 2

India's automobile industry is expected to witness sustained momentum in 2026, with Axis Securities maintaining an optimistic outlook across two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors, supported by demand recovery and policy-led tailwinds.

According to the report, "The overall industry outlook remains optimistic, with gradual demand recovery, a reduction in the GST rate, and income tax relief as key factors driving demand in FY26."

The two-wheeler segment recorded cumulative domestic sales growth of 10 per cent year-on-year (YoY) during Apr-Dec'26, while exports showed "improved traction across global markets." The report notes that "potential upside triggers for domestic demand include government-led consumption measures, a rural demand uptick, and new model launches."

The three-wheeler segment continued to outperform, with domestic wholesales rising 49 per cent YoY on a year-to-date basis. The report highlighted that the segment posted "strong growth of 80 per cent YoY" in December, underlining robust demand conditions.

Domestic PV volumes grew around 6 per cent YoY during Apr-Dec'26, led by strong performances from multiple OEMs. Looking ahead, the brokerage stated, "We remain cautiously positive and expect industry volumes to grow in high single digits," supported by "a reduction in GST rate and improving affordability for consumers."

The commercial vehicle segment posted a healthy 9 per cent YoY growth in domestic volumes on a YTD basis, reflecting improving freight demand. The report expects "high-single-digit industry growth in FY26 for CV players, driven by growing demand in the Bus segment."

The tractor segment continues to benefit from favourable agri fundamentals, with domestic sales rising 21 per cent YoY during the period. The report said volumes were supported by "favourable monsoons and high reservoir levels." Looking ahead, Axis Securities expects "the positive momentum to continue," driven by "GST reductions, enhanced reservoir levels, robust rabi sowing, and improved kharif harvest."

Overall, the report indicates that policy support, rural recovery and improving affordability are likely to keep the automobile sector on a steady growth path through 2026.

- ANI

Share this article:

Reader Comments

S
Sarah B
As someone working in logistics, the 9% growth in CVs is the most encouraging sign. It directly reflects increased economic activity and freight movement. If bus demand is also picking up, it points to better public transport and tourism. Solid report.
P
Priyanka N
The tractor segment growth of 21% is heartening. Finally, some positive news for our farmers! Good monsoons and reservoir levels are a blessing. A robust rural economy is the true backbone of India's growth story. Let's hope this momentum translates into better incomes in the villages.
A
Aman W
Optimistic reports are good, but I hope this growth is inclusive and sustainable. The article mentions "improving affordability," but in cities, traffic and pollution are massive issues. Growth in EVs should be highlighted more strongly. We need green mobility alongside this volume growth.
V
Vikram M
Three-wheeler sales up 49%! This is the real story. E-rickshaws and autos are the lifeline for last-mile connectivity in so many towns. This growth means more employment for drivers and cheaper transport for millions. Great to see.
K
Karthik V
Cautiously positive is the right term for PVs. While 6% growth is decent, the real test is whether new models and potential tax cuts can trigger a bigger demand wave. Waiting to see if SUVs continue to dominate or if sedans make a comeback.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50