Archive · 18 Aug 2025
Indian Auto Sector Shows Weak Demand in Most Segments
The Indian auto industry faced a slowdown in the first quarter of the fiscal year, with sales in most areas being weaker than expected, especially for motorcycles, scooters and cars.
Demand for cars went down, but the utility vehicles saw modest growth, while tractors were the exception, doing well.
Overall, the industry's performance has been below expectations.
Experts predict slower growth in the future.
Auto sector, excluding tractors, experienced a 6% YoY decline in domestic volumes in Q1 FY26.
Two-wheeler volumes decreased 8% YoY, with declines in both motorcycles and scooters.
Passenger and commercial vehicles both saw a 1% YoY fall in volumes.
Tractors exhibited a robust 9% YoY growth, contrasting with other segments.
Industry projects less than expected growth in key segments after the first four months of FY26.
- Who
- Motilal Oswal Financial Services (Report)
- What
- Muted performance in the Indian auto sector.
- When
- First quarter of FY26.
- Where
- India.
- Why
- Weakness in urban demand.
Expectations
Actual Performance
Performance vs. Expectations
Expectations
Industry analysts had higher expectations for growth across multiple segments.
Actual Performance
Actual performance was lower than anticipated in most segments except tractors.
- Domestic Volume Decline (Excluding Tractors)
- 6% YoY
- Two-Wheeler Volume Decline
- 8% YoY
- Tractor Volume Growth
- 9% YoY
- Car Volume Decline (PVs)
- 11% YoY
- Utility Vehicle Growth (PVs)
- 4% YoY
- Projected PV growth
- 2-4%
- Projected 2W growth
- High single digits
