Passenger vehicle (PV) wholesale volumes have grown by 3.6% YoY in 8M FY2026 against ICRA’s forecast of 1-4% drawn at the beginning of the year. The credit profile of PV OEMs is expected to remain healthy, supported by improved profitability, low leverage, adequate liquidity and/or strong parentage.

• ICRA expects wholesale volume growth of 1-4% in FY2026 with an anticipation of sustained demand aided by GST rate cuts across segments. Continued new model launches by original equipment manufacturers (OEMs) and an expectation of demand sustenance in the winter wedding season is expected to support volume growth for the industry.
• In 8M FY2026, retail sales grew by 6.1%, led by an all-time high festive season. With GST rate cuts on passenger vehicles, the industry recorded 8.0 lakh units in the 42-day festive period, which grew by a strong 21% over the corresponding previous period. The demand sustained post festive season, which led to reduction in inventory days to 44-46 days at the end of November 2025 (as per the Federation of Automotive Dealers Association, or FADA).