India's automobile industry achieved a historic milestone in the financial year 2025–26, with passenger vehicle (PV) wholesales reaching 4.643 million units, registering a 7.9% year-on-year growth, the highest annual sales in seven years, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on April 14, 2026.

Record-Breaking Fourth Quarter

The January–March quarter of FY26 also saw record performance, with PV sales reaching 1.316 million units, up 13.2% compared to the same period last year. All vehicle categories—PV, commercial vehicles (CV), three-wheelers (3W), and two-wheelers (2W)—posted their highest-ever fourth-quarter sales.

Key Growth Drivers

Shailesh Chandra, President of SIAM, attributed the strong performance to "positive sentiments created through GST 2.0 reforms and multiple repo rate cuts during the year." The mid-year turnaround was particularly notable: while the April–August period remained muted due to consumer caution ahead of GST 2.0 implementation, the September–March window saw a decisive upshift as the reforms improved affordability and lifted consumer sentiment.

EV Adoption Accelerates

Electric vehicle (EV) adoption played a pivotal role in the sector's expansion. Registrations of electric passenger vehicles increased by more than 80% during the year, reflecting accelerating consumer shift toward sustainable mobility.

Exports Reach New Highs

India's position as one of the top global automotive manufacturing hubs was further reinforced, with PV exports climbing 17.5% to 905,000 units in FY26. SIAM noted steady demand across the Middle East, Africa, and Latin America.

Outlook and Risks

Looking ahead to FY27, SIAM stated that domestic demand and macroeconomic fundamentals remain robust, which should support steady industry growth. However, uncertainties arising from the West Asia conflict, particularly potential impacts on crude oil prices, commodity prices, freight rates, and the broader economy, need to be closely monitored.

The record performance of India's passenger vehicle sector signals sustained demand for polyurethane applications in automotive seating, interior components, lightweighting solutions, and coatings, directly supporting the domestic market for PU feedstock.

Source: SIAM, The Hindu