Wholesale and retail volumes recorded strong YoY growth in July 2026, with offtake continuing to be supported by improved replacement demand post the GST rate cuts. ICRA expects industry volumes to expand by 4-6% in FY2027. The moderation in YoY growth factors in the elevated base of H2 FY2026 , normalisation of the pent-up demand, effects of rise in vehicle costs, weak monsoon outlook etc.

• Wholesale volumes rose by 34% year-on-year (YoY) to 4.6 lakh units in July 2026 as original equipment manufacturers (OEMs) continued steady production to cater to the robust domestic demand.
  
• Inventory levels remained modest at 33-35 days in July 2026 compared to 55 days in June 2025, as per the Federation of Automobile Dealers Association (FADA), aided by stronger retail offtake.