Wholesale and retail volumes recorded strong YoY growth in June 2026, with demand continuing to be supported by GST rate cuts, the low base of June 2025 and an extended summer wedding season. ICRA expects industry volumes to expand by 4-6% in FY2027. The moderation in YoY growth factors in the elevated base of FY2026 , normalization of the pent-up demand, effects of rise in vehicle costs, weak monsoon outlook etc. While utility vehicles (UVs) continue to drive demand, mini, compact and super-compact segments have shown a slight recovery after the GST rate cuts. The UV segment is likely to remain the key volume driver, though demand for passenger cars is also expected to increase.

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