NEW DELHI– India’s automobile industry posted a strong recovery in September, with sales rising between 5 and 10 percent across key segments, according to a report released Thursday by ratings agency ICRA.
The rebound was driven by Goods and Services Tax (GST) reforms and the onset of the festive season, signaling renewed momentum for the sector in FY2026.
The commercial vehicle (CV) segment recorded a robust 11.9 percent year-on-year increase in wholesale volumes. Infrastructure expansion and revived logistics activity supported an overall 3.2 percent growth in the first half of FY26. However, retail sales in certain categories, particularly Medium and Heavy Commercial Vehicles (M&HCVs), saw a temporary dip as fleet operators delayed purchases in anticipation of tax adjustments.
Two-wheeler retail sales climbed 6.5 percent year-on-year during the month after a slow start caused by deferred buying. Wholesale volumes rose 6 percent as manufacturers ramped up dispatches ahead of the festive demand, the report noted.
The passenger vehicle (PV) segment also gained traction following the GST cut, with retail sales growing 5.8 percent and wholesale volumes up 4.5 percent year-on-year. Sequentially, wholesale volumes surged 15.7 percent as automakers stocked dealerships for the festive period. Despite higher inventory levels, utility vehicles continued to dominate the segment.
ICRA maintained a stable to positive outlook for the Indian auto industry in FY2026. It projected wholesale growth of 3 to 5 percent for commercial vehicles, 6 to 9 percent for two-wheelers, and 1 to 4 percent for passenger vehicles for the fiscal year.
The report said improved affordability, new model launches, rising rural demand, and sustained festive sentiment are expected to be key growth drivers for the sector in the months ahead. (Source: IANS)
