India’s passenger vehicle wholesale market is set for a 5-7% expansion in FY26, according to ICRA’s latest analysis. Buoyed by strong demand signals, GST reductions, and a pipeline of new models, the sector shows promising momentum.
January data underscores the bullish trend. Sequential wholesale growth hit 14% for passenger vehicles, as companies scaled production amid eager buyers. Annually, retail sales rose 7%, with wholesale up 12% to approximately 4.5 million units.
Festive influences like Pongal, peak wedding periods, and model refreshes fueled January’s demand spike in passenger vehicles and two-wheelers alike. Overall vehicle wholesale sales increased 6.7% year-on-year, retail by 8%.
Two-wheelers stole the spotlight, with wholesale sales leaping 25% to 1.8 million units annually. The 10-month FY26 cumulative (April-January) wholesale growth settled at 6.7%.
Retail two-wheeler volumes surged 20.8% in January, propelled by seasonal festivals, bridal demands, and enhanced consumer wallets. For full FY26, two-wheeler sales are tipped to grow 6-9%, thanks to GST-driven replacements, urban rebound, and rural income uplift.
Notably, electric two-wheeler retail hit 123,012 units—a 25.3% annual gain—highlighting electrification’s rapid ascent.
As economic indicators align, this forecast reflects a maturing auto ecosystem in India, ready to accelerate growth through innovation and inclusive demand recovery.