Indian Auto Industry Scripts Landmark FY26 with Highest Sales in 7 Yrs

India's auto industry set a new record in FY 2025-26, with all vehicle segments—passenger, commercial, three-wheelers, and two-wheelers—achieving their highest-ever annual sales in a single financial year for the first time in seven years.

India's automobile industry scripted a landmark chapter in Financial Year 2025-26, with every major vehicle category -- passenger vehicles, commercial, three-wheelers and two-wheelers -- recording their highest-annual sales in a single financial year, for the first time in seven years. The industry, which had started the year on a modest note with a slight de-growth in the first half, staged a powerful comeback in the second half, powered by a confluence of structural policy reforms, improved consumer sentiment and supportive macroeconomic conditions.

Record-Breaking Annual Sales Across Segments

According to the Data released by the Society of Indian Automobile Manufacturers (SIAM), Passenger vehicles closed FY 2025-26 at a record 46.43 lakh units, growing 7.9 per cent over the previous year. Commercial vehicles posted their best-ever annual sales of 10.80 lakh units, up 12.6 per cent, while three-wheelers touched 8.36 lakh units with a growth of 12.8 per cent. The two-wheeler segment was the crown jewel of the year, surpassing 2.17 crore units -- a growth of 10.7 per cent -- crossing a peak last achieved in FY 2018-19.

The turnaround in the second half was particularly pronounced, with passenger vehicles growing 16.7 per cent and two-wheelers surging 21.5 per cent in H2, after a flat or negative H1. Electric vehicle adoption added further fuel to the rally, with electric passenger vehicle registrations jumping over 80 per cent in the year, and EV two-wheeler offtake rising sharply in March amid growing concerns over fuel prices.

Historic Q4 Performance

The January-to-March quarter of FY 2025-26 was equally historic, with all four segments posting their highest-ever Q4 sales. Passenger vehicles recorded 13.16 lakh units in Q4, up 13.2 per cent, while commercial vehicles clocked 3.25 lakh units, growing 18.9 per cent. Three-wheelers posted Q4 sales of 2.27 lakh units, a jump of 26.7 per cent, and two-wheelers delivered a stellar 57.73 lakh units, surging 26.4 per cent over Q4 of the previous year.

Drivers of Growth: Policy and Consumer Sentiment

Shailesh Chandra, President, SIAM, attributed the strong performance to a series of well-timed policy interventions. "Though FY 2025-26 started modestly, the Indian auto industry has closed the year on a high note with every vehicle category posting their highest-ever sales in a financial year after seven years. The strong contributors to this growth have been the positive sentiments created through GST 2.0 reforms and multiple repo rate cuts during the year," he said.

GST rationalisation improved affordability, income tax relief boosted purchasing power, and successive RBI repo rate cuts lowered financing costs and eased the total cost of ownership -- particularly for commercial vehicle fleet operators.

Landmark Year for Exports

Exports, too, had a landmark year, with passenger vehicle exports touching 9.05 lakh units, up 17.5 per cent; two-wheeler exports at a record 51.8 lakh units, up 23.4 per cent; three-wheeler exports surging 50.1 per cent to 4.61 lakh units; and commercial vehicle exports growing 17.4 per cent to 0.95 lakh units.

Rajesh Menon, Director General, SIAM, said, "Each vehicle category posted their highest-ever sales in the January to March quarter with double-digit growth compared to the previous year's quarter." (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)