NewKerala.com

India's Auto Sales Accelerate: 5-7% Growth Forecast for Passenger Vehicles

Passenger vehicle retail sales in India grew 7% in January 2026, with wholesale volumes rising 12% to 4.5 lakh units. The growth is attributed to robust domestic demand, GST rate cuts, the wedding season, and new model launches. ICRA forecasts passenger vehicle wholesale volumes to expand by 5-7% in FY26, supported by these sustained factors. The two-wheeler segment also saw strong growth of 25% year-on-year in January, with electric two-wheeler retail volumes increasing by 25.3%.

Key Points: India Passenger Vehicle Sales Surge, 5-7% Growth Forecast

  • Passenger vehicle wholesale up 12% in Jan
  • Two-wheeler sales surge 25% YoY
  • GST cuts and new models fuel demand
  • Electric two-wheeler sales jump over 25%
2 min read

India's passenger vehicle sales surge, likely to expand 5-7 pc in FY26

India's passenger vehicle sales rose 7% in Jan 2026. ICRA forecasts 5-7% growth for FY26, driven by GST cuts and strong demand.

"Domestic automobile demand recorded strong growth across both two-wheeler (2W) and passenger vehicle (PV) segments - ICRA Report"

New Delhi, Feb 20

Passenger vehicle retail sales rose 7 per cent in January in India, while wholesale volumes rose 12 per cent to 4.5 lakh units, a report said on Friday.

The report from ICRA said wholesale dispatches grew 14 per cent sequentially over December 2025, even as original equipment manufacturers (OEMs) ramped up production to cater to robust domestic demand.

ICRA forecasts passenger vehicle wholesale volumes to expand 5-7 per cent in FY26, supported by sustained demand momentum, GST cuts and continued new model launches.

"Domestic automobile demand recorded strong growth across both two-wheeler (2W) and passenger vehicle (PV) segments in January 2026, supported by sustained demand momentum, GST rate cuts, wedding season demand and new model launches," the report said.

The 14 per cent sequential growth in wholesale volumes in January was posted despite production curbs for annual maintenance. Retail sales were supported by the winter wedding season, new model launches and revised GST rates.

Overall PV wholesale growth in the 10‑month of FY26 period stood at 6.7 per cent while retail volumes grew 8 per cent.

The domestic automobile sector is expected to maintain steady growth momentum through FY2026, supported by policy measures to strengthen domestic manufacturing, improving affordability following GST rationalisation, recovery in consumption and sustained rural income levels after a normal monsoon.

Meanwhile domestic two-wheeler wholesale volumes grew 25 per cent YoY, reaching 1.8 million units, while wholesale volumes recorded 6.7 per cent growth during 10 months of FY2026 (April-January).

Retail sales grew 20.8 per cent YoY in January, aided by Pongal or Makar Sankranti demand, wedding season footfalls and improving affordability, the report noted.

The report estimates two-wheeler domestic volumes to grow 6-9 per cent YoY in FY26, aided by improved replacement demand after GST rate cuts, gradual recovery in urban consumption and healthy rural incomes.

Electric two-wheeler retail volumes touched 1,23,012 units in January, up 25.3 per cent YoY.

- IANS

Share this article:

Reader Comments

S
Sarah B
The surge in electric two-wheeler sales is the most promising part of this report. 25% YoY growth is impressive. We need more focus on EV infrastructure now to keep this momentum going. The future is electric!
R
Rohit P
Wedding season and festivals always give a boost, but what about after? The real test is if this demand holds. Also, with more cars on the road, our cities need better traffic management and parking solutions urgently. It's already a nightmare in Delhi and Bangalore.
P
Priya S
As a middle-class family, the GST cut made a real difference. We were planning to buy a new car for years and finally booked one last month. Feeling optimistic about the economy. Jai Hind!
M
Michael C
While the growth numbers are positive, I hope the government and manufacturers are also investing in public transport. Personal vehicle growth cannot be the only metric for development. We need efficient metros and buses to reduce congestion and pollution.
K
Kavya N
The two-wheeler growth, especially in rural areas, is heartening. It shows improved rural incomes after a good monsoon. A scooter or bike is often the first vehicle for a family, enabling mobility and access to opportunities. 🇮🇳

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

Leave a Comment

Minimum 50 characters 0/50