In
December 2025, passenger vehicle (PV) retail sales recorded a strong 27% YoY
growth, supported by
sustenance of demand due to the Goods & Services Tax (GST) rate cuts and
the winter wedding season. The volumes, however, reduced by 4% sequentially
after the high offtake in November 2025. The wholesale volumes also grew by
27% YoY to 4.0 lakh units in December 2025, which induced select
original equipment manufacturers (OEMs) to cut short the periodic maintenance
shutdown period to keep production lines humming. Overall wholesale volume
growth in 9M FY2026 has been 5.9% YoY, while retail volumes grew 8.1%.
Inventory
levels reduced to 37-39 days by December 2025 from 60 days at the end of September
2025, as per the Federation of Automobile Dealers Association (FADA),
aided by stronger retail offtake. In December 2025, utility vehicles (UVs)
accounted for 65% (69% in October 2025) of the overall PV industry volumes,
while the mini, compact and super-compact segments have seen some revival in
volumes after the GST rate cuts. The UVs are likely to remain the key volume
drivers; however, demand for the passenger cars segment is also expected to
revive to an extent.
Export
volumes reduced by 12% on YoY basis in December 2025 owing to more domestic focused
supplies. Maruti Suzuki India Limited maintained its lead as the top exporter
with market share of about 46%, followed by Hyundai Motor India Limited. In 9M
FY2026, export volumes expanded by a healthy 16% on a YoY basis, indicating an
increased supply push from Indian OEMs.
ICRA
expects wholesale volume growth of 5-7% in FY2026 (5.9% YoY growth in 9M
FY2026) with an
anticipation of continuous steady demand aided by the GST rate cuts across
segments. Continued new model launches by the OEMs and an expectation of
sustained demand is likely to support volume growth for the industry.
EXHIBIT
1: Trend in monthly PV volumes – Domestic (in units)
PowerPoint Presentation
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
