Domestic Passenger Vehicle Sales Expected to Grow 4-7% in FY26: ICRA

As far as the domestic commercial vehicle (cv) Industry is concerned, it is expected to register a marginal growth in fy26. File Photo: www.icra.in

Passenger vehicle sales Volume in India is expected to grow at a moderate pace of 4-7% in fy26 with most demand drivers remaining neutral or favorite, according to ratings agenty icra.

As for two-wheelers, icra said it estimates the industry volumes to grow at a healthy pace of 6-9% in fy26, Following an Estimated 11-14% Growth in FY25.

Passenger Vehicle (PV) Industry Volumes Reached An All-Time High of 4.2 Million Units in FY24. In Year-to-Date (YTD) FY25, Wholesale Volumes Remained Stable LED by Steady Production by Automobile Manufacturers but The Industry Volume Growen Modest at About 2% AGAIP OF Waning Replacement Demand and High Inventory Levels, ICRA said in a statement.

“Healthy retail has helped moderate dealer inventory holding in the past few months. Nonetheless, The Inventory Continues to be Moderately High, ”it added.

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“The industry’s growth in fy2025 is expected at 0-2%. Most of the demand drivers for the industry – disposable income, new model launches, cost of owned 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 Ratings Agey Said.

In the two-wheler (2W) industry, ICRA said Volumes Witnessed Strong Growth in the Current Fiscal At About 10% Yoy Growth in YTD FY2025, with the Industry Continuing to Recover from Lower from Lower Levels During FY2020-FY2022.

The Industry Prospects Over the past few months have remained supported by improved rural demand after healthy monsoon procipation. “Rural demand for the industry is expected to remain healthy, with rabi sowing to date remaining healthy,” it noted.

“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 AT AT ATA Pace of 6-9% in FY2026, Following an estimated 11-14% in FY2025, “ICRA said.

As far as the domestic commercial vehicle (cv) Industry is concerned, it is expected to register a marginal growth in fy26.

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“Factors like improvement in Economic Activities, Continued Budgetary Support Towards Infrastructure Spending, Healthy Freight Avillability Furter Furting Freight Rates, Regulators Scrapage policy and push towards cleaner vehicles could drive replacement demand, ”icra said.

“Mandatory scraping of older government wheels and replacement demand would drive grown in buses, while growth in LCV (Trucks) IS Expected to Be Lower, Impacted by Cannibalization from e3WS and A Slowdown in E-Commerce Among Other Factors.