India’s automobile industry began FY2026-27 on a strong note, with passenger vehicles, commercial vehicles and three-wheelers registering their highest-ever first-quarter sales, while exports across all vehicle segments touched record levels, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
The industry’s robust performance in the April-June quarter was supported by strong domestic demand, lower GST rates, softer financing costs, new model launches and healthy export demand, despite geopolitical uncertainties in West Asia.
Passenger vehicles achieve record sales
Passenger vehicle sales climbed 25.9% year-on-year to an all-time high of 1.27 million units during the first quarter of FY2026-27.
Utility Vehicles (UVs) continued to dominate the segment, accounting for nearly 68% of passenger vehicle sales. UV sales grew 28.6%, while passenger cars registered a 21.3% increase compared with the same quarter last year.
Passenger vehicle exports also reached a record 2.22 lakh units, up 8.8% year-on-year. SIAM attributed the export growth to strong demand from Latin America, along with improving demand from Europe and Japan, although exports to the Middle East were affected by regional disruptions.
Two-wheeler demand remains strong
The two-wheeler industry sold 5.63 million units during the quarter, recording a healthy 20.3% growth over the corresponding period last year.
Scooters outpaced motorcycles, continuing the momentum generated by reduced GST rates that have supported consumer demand.
Exports reached an all-time quarterly high of 1.55 million units, registering an impressive 36.6% growth. Strong demand from Latin America complemented steady exports to South Asia and Africa.
Three-wheelers record best-ever first quarter
Three-wheeler sales rose 29.7% to a record 2.14 lakh units in the April-June period, driven by robust demand for both passenger and goods carriers.
SIAM said improving economic activity and easier financing options have boosted urban demand for three-wheelers.
Exports also touched a new high of 1.51 lakh units, growing 57.7% over the same quarter last year.
Commercial vehicles maintain growth momentum
Commercial vehicle sales reached their highest-ever first-quarter level at 2.65 lakh units, registering 18.3% growth year-on-year.
Within the segment, goods carriers recorded double-digit growth, supported by replacement demand and higher activity in the mining and cement sectors, while passenger commercial vehicles posted marginal growth.
Commercial vehicle exports increased 43.3% to around 28,000 units, marking the highest-ever Q1 exports for the segment, driven largely by strong demand for pick-up vehicles in Southeast Asia.
Industry remains optimistic
Society of Indian Automobile Manufacturers President Shailesh Chandra said passenger vehicles, commercial vehicles and three-wheelers achieved their highest-ever first-quarter sales, while every vehicle segment recorded record exports during the quarter.
“The strong performance across segments in Q1 of 2026-27, despite headwinds arising from disruptions in West Asia, can be attributed to supportive domestic demand, aided by lower GST rates, softer financing costs, low base effect and introduction of new models,” he said.
He added that while consumer demand remains stable, the industry continues to closely monitor geopolitical developments and the progress of the monsoon due to their potential impact on agricultural output and rural demand.
Positive outlook for festive season
SIAM expects demand to remain healthy during the July-September quarter, supported by lower vehicle prices following GST 2.0 implementation, easier financing and easing inflation.
The industry also expects the festive season to sustain sales momentum as monsoon conditions have improved following increased rainfall in late June and early July.
However, SIAM cautioned that commodity prices continue to remain a concern, while the evolving geopolitical situation in West Asia could influence the supply of fuels and key industrial commodities.