How is India’s auto sector recovering in September?
Synopsis
In September, India's auto sector showcased a remarkable recovery with sales surging by 5 to 10 percent across various segments. Driven by GST reforms and festive season demand, this growth demonstrates the industry's resilience and optimism for FY2026.
Key Takeaways
Sales growth of 5-10% across segments.
GST reforms positively impacting the sector.
Commercial vehicle segment grew 11.9% YoY.
Passenger vehicles saw a 5.8% increase in retail sales.
Positive outlook maintained for FY2026.
New Delhi, Oct 30 (NationPress) India’s automobile industry has shown significant recovery in September, with sales rising between 5 to 10 percent across multiple segments, according to a report released on Thursday.
This surge in sales can be attributed to Goods and Services Tax (GST) reforms and the beginning of the festive season, indicating a favorable trend for the industry in FY2026, as per the insights from ICRA.
The commercial vehicle (CV) segment experienced a remarkable year-on-year growth of 11.9 percent in wholesale volumes.
While infrastructure projects and revitalized logistics facilitated a 3.2 percent growth in the first half of FY26, retail sales in specific categories, such as Medium and Heavy Commercial Vehicles (M&HCVs), faced a temporary contraction as fleet owners postponed purchases in anticipation of tax reforms.
Retail sales of two-wheelers witnessed a 6.5 percent year-on-year increase during the month, following subdued sales in the initial weeks due to purchase delays.
Wholesale volumes also saw a 6 percent increase as manufacturers ramped up dispatches, the report highlighted.
The passenger vehicle (PV) segment gained considerable momentum after the GST reduction, with retail sales increasing by 5.8 percent year-on-year and wholesale volumes rising 4.5 percent, according to ICRA.
Wholesale volumes experienced a sequential increase of 15.7 percent as OEMs prepared dealerships for the festive season. Despite elevated inventory levels, utility vehicles remained the top sellers, the report noted.
ICRA has maintained a stable to positive outlook for the Indian auto industry in FY2026. For this fiscal year, the agency predicts a modest 3-5 percent growth in wholesale for the CV sector, 6-9 percent for two-wheelers, and 1-4 percent for passenger vehicles.
Factors such as improved affordability, new model introductions, rising rural demand, and sustained festive demand are expected to drive growth, the report stated.
Point of View
The recent uptick in India's auto sector signals a promising recovery, rooted in strong market demand and effective policy changes. The observed growth across various segments indicates resilience and adaptability, paving the way for sustained economic momentum in the country.
NationPress
10 May 2026
Frequently Asked Questions
What factors contributed to the recovery of India's auto sector in September?
The recovery was primarily driven by GST reforms, the onset of the festive season, and improved demand across various vehicle segments.
What was the growth percentage for commercial vehicles?
The commercial vehicle segment recorded a remarkable year-on-year growth of 11.9 percent in wholesale volumes.
How did the retail sales of two-wheelers perform?
Retail sales of two-wheelers increased by 6.5 percent year-on-year during September, following a period of muted sales.
What is ICRA's outlook for the auto sector in FY2026?
ICRA maintains a stable to positive outlook, forecasting modest wholesale growth of 3-5 percent for commercial vehicles, 6-9 percent for two-wheelers, and 1-4 percent for passenger vehicles.
What are the expected growth drivers for the auto industry?
Growth drivers include improved affordability, new model launches, increased rural demand, and sustained festive demand.
