ICRA expects wholesale volume growth of 1-4% in FY2026 (1.5% YoY growth in 7M FY2026) with an anticipation of continuous demand boost aided by GST rate cuts across segments. Continued new model launches by the OEMs and an expectation of healthy demand in the ongoing wedding season is likely to support further volume growth for the industry.

Inventory levels reduced to 53-55 days by October 2025 from 60 days in September 2025, as per the Federation of Automobile Dealers Association (FADA) as the industry witnessed a strong 21% YoY growth to 8.0 lakh units in the 42-day festive period. Utility vehicles (UVs) continue to account for 66 67% of the overall PV industry volumes, while the compact and super compact segment saw some revival in the volumes after GST rate cuts. UVs are likely to remain the key volume drivers; however, with GST rate cuts, demand for the passenger cars segment is also likely to revive.

EXHIBIT : Trend in monthly PV volumes – Domestic (in units)

Source: SIAM data, FADA, ICRA Research, industry sources; Note: Although SIAM’s monthly statement does not include Tata Motors Limited (TML) from April 2020, TML’s volumes have been factored in the above trend