+
India’s Passenger Vehicle Sales to Grow 4-7% in FY26: ICRA
ECONOMY & POLICY

India’s Passenger Vehicle Sales to Grow 4-7% in FY26: ICRA

Passenger vehicle (PV) sales in India are projected to grow at a moderate pace of 4-7% in FY26, with demand drivers remaining largely neutral or favourable, according to ratings agency ICRA. The industry reached an all-time high of 4.2 million units in FY24, while YTD FY25 growth has remained modest at around 2%, due to waning replacement demand and high inventory levels.

ICRA notes that while healthy retail sales have eased dealer inventory pressure in recent months, stock levels remain moderately high. For FY25, the agency expects PV growth to remain subdued at 0-2%, with factors such as disposable incomes, new model launches, and cost of ownership playing a neutral to positive role in future demand.

The two-wheeler (2W) industry, on the other hand, is set to grow at a healthy 6-9% in FY26, following an estimated 11-14% growth in FY25. The sector has witnessed strong recovery, with YTD FY25 growth at approximately 10% year-on-year, driven by improved rural demand and healthy monsoon precipitation. A reduction in income tax burden post recent budget changes is also expected to boost disposable incomes and further stimulate demand.

In the commercial vehicle (CV) segment, growth is expected to remain marginal in FY26. Economic activity improvements, increased infrastructure spending, and government policies like the vehicle scrappage initiative are likely to drive replacement demand. However, light commercial vehicles (LCVs) may see slower growth due to competition from electric three-wheelers and a slowdown in e-commerce. ICRA estimates growth of 0-3% for medium and heavy commercial vehicles (M&HCVs), 3-5% for LCVs, and 8-10% for buses in FY26.

Passenger vehicle (PV) sales in India are projected to grow at a moderate pace of 4-7% in FY26, with demand drivers remaining largely neutral or favourable, according to ratings agency ICRA. The industry reached an all-time high of 4.2 million units in FY24, while YTD FY25 growth has remained modest at around 2%, due to waning replacement demand and high inventory levels. ICRA notes that while healthy retail sales have eased dealer inventory pressure in recent months, stock levels remain moderately high. For FY25, the agency expects PV growth to remain subdued at 0-2%, with factors such as disposable incomes, new model launches, and cost of ownership playing a neutral to positive role in future demand. The two-wheeler (2W) industry, on the other hand, is set to grow at a healthy 6-9% in FY26, following an estimated 11-14% growth in FY25. The sector has witnessed strong recovery, with YTD FY25 growth at approximately 10% year-on-year, driven by improved rural demand and healthy monsoon precipitation. A reduction in income tax burden post recent budget changes is also expected to boost disposable incomes and further stimulate demand. In the commercial vehicle (CV) segment, growth is expected to remain marginal in FY26. Economic activity improvements, increased infrastructure spending, and government policies like the vehicle scrappage initiative are likely to drive replacement demand. However, light commercial vehicles (LCVs) may see slower growth due to competition from electric three-wheelers and a slowdown in e-commerce. ICRA estimates growth of 0-3% for medium and heavy commercial vehicles (M&HCVs), 3-5% for LCVs, and 8-10% for buses in FY26.

Next Story
Real Estate

Shriram Properties Launches ‘Codename: The One’ in Bengaluru

Shriram Properties (SPL), a leading real estate developer focused on the mid-market and mid-premium segments, has announced the launch of its latest residential project under the banner “Codename: The One” in Bengaluru’s Electronic City corridor. This feature-rich gated community will offer 340 spacious 2- and 3-BHK residences, with a total saleable area of approximately 5 lakh square feet and an estimated revenue potential of over Rs 3.5 billion. The project is expected to be developed over a span of more than three years.  Strategically located near the Bommasandra Metro stat..

Next Story
Resources

India Warehousing Show 2025 Closes with Strong Global Presence

The 14th edition of the India Warehousing Show (IWS) 2025 concluded successfully at Yashobhoomi (IICC), Dwarka, drawing participation from over 300 exhibitors across 15 countries and welcoming 15,000+ visitors. Recognised as India’s leading platform for warehousing and logistics excellence, IWS 2025 offered a comprehensive display of cutting-edge automation, sustainable warehousing solutions, and next-gen supply chain technologies. The show was inaugurated by Shri Pankaj Kumar, Joint Secretary – Logistics, DPIIT, Ministry of Commerce and Industry, Government of India. In his opening a..

Next Story
Equipment

MHIET Launches 450kW Gas Cogeneration System with H₂ Co-Firing

Mitsubishi Heavy Industries Engine & Turbocharger (MHIET), part of the Mitsubishi Heavy Industries Group, has launched a new 450kW gas cogeneration system, the SGP M450, jointly developed with Toho Gas Co.,. The system supports hydrogen co-firing at up to 15 vol per cent, with no loss in performance or reliability.  The system is currently available in the Japanese market, and has been developed from the existing GS6R2 city gas engine platform. Key modifications were made to the fuel gas and engine control systems to enable hydrogen co-firing.   Verified through de..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?