India auto wholesales expected to sustain uptrend across segments through FY26–28: Report

New Delhi: India’s automotive sector is set for sustained growth trajectories over the next two fiscal years, with passenger vehicles and two-wheelers expected to outpace heavy commercial vehicles and tractors.

According to a research report by Nuvama, the domestic automobile industry will witness a divergence in growth momentum across different segments.

“Over FY26-28E, we forecast a domestic industry volume CAGR of 8 per cent for PVs, 6 per cent for 2Ws, 2 per cent for MHCVs and 1 per cent for tractors,” the report said.

The near-term outlook for May 2026 indicates a broad-based sustaining of the wholesale uptrend, driven primarily by domestic demand factors.

“We reckon the wholesales uptrend shall sustain in May-26 led by better affordability, new products, seasonal wedding demand and ample financing availability. Moreover, export growth is likely to remain positive for most OEMs despite some pressure on shipments to the Middle East,” the report stated.

In the passenger vehicle segment, domestic volumes are projected to expand by over 20 per cent year-on-year in May 2026. The report noted that discounts trended higher on a sequential basis for Maruti Suzuki India Limited and Hyundai, while remaining flat for Mahindra & Mahindra and reducing for Tata Motors Passenger Vehicles.

“We estimate total volume growth would be 35 per cent YoY for TMPV (to 56,700 units), 25 per cent for MSIL (to 225,000 units), 15 per cent for MM-Auto (to 97,000 units) and 7 per cent for Hyundai (to 63,000 units). Hyundai’s exports are likely to be temporarily affected by high exposure to the Middle-East region (over 40 per cent of exports),” the report said.

The two-wheeler industry is expected to see a strong double-digit expansion of over 10 per cent year-on-year in the domestic market for May 2026, supported by a low base, marriage season demand, and affordability. Mass-market manufacturers are anticipated to post positive export growth, led by demand in Africa and Latin America.

“For May-26 wholesales, we estimate total volume growth shall be 18 per cent YoY for TVSL (to 510,000 units), 16 per cent for EIM-RE (to 104,000 units), 16 per cent for BJAUT (to 445,000 units) and 12 per cent for HMCL (to 570,000 units),” the report added.

Tractor industry volumes are also projected to continue their uptrend in May 2026 with over 15 per cent year-on-year domestic growth, aided by rural liquidity. However, fuel inflation led by the West-Asia conflict has turned terms of trade adverse.

For the commercial vehicle segment, growth is anticipated to moderate compared to the second half of fiscal 2026 due to fuel prices and freight uncertainties, adding, “We estimate total volumes shall increase 17 per cent YoY for TMCV (to 33,000 units), 11 per cent for EIM-VECV (to 8,200 units) and 5 per cent for AL (to 16,200 units).”