New Delhi, May 2 (IANS). India’s auto sector witnessed demand-driven improvement during FY 2026, but this improvement was not uniform in every segment. According to a new report, demand from urban areas and increasing preference for premium vehicles drove this recovery, while rural demand remained somewhat weak.
According to the Deloitte India report, two-wheelers played the biggest role in this recovery. Their wholesale sales increased by 10.7 percent and retail sales by 13.4 percent year-on-year.
The trend of premium vehicles continued in the passenger vehicle segment, where the share of the mid-size entry segment grew while the traditional entry-level segment weakened.
Improvement was also seen in the commercial vehicle segment, where it grew at the rate of about 12.6 percent. The increase was driven by infrastructure activities and demand for replacement of old vehicles.
“Electric vehicle (EV) adoption is growing, but still uneven. Access remains limited due to cost and lack of infrastructure,” the report said.
The two-wheeler market saw a strong growth of 40.7 percent in demand for premium motorcycles and 18.5 percent in demand for scooters. Electric two-wheeler sales grew by 21.8 percent, but total EV share reached only 6.5 percent.
Kerala led the way in EV adoption with 14.1 percent, while Karnataka and Odisha also saw good growth. Whereas in Maharashtra, despite increase in sales, the share declined to 9.2 percent, as demand for vehicles with conventional engines increased again.
The report said sub-350cc motorcycles became cheaper due to GST changes and price cuts in the second half of FY26, bringing their prices closer to commuter bikes.
Demand for entry-level vehicles remained under pressure across the auto sector, while premium and feature-rich vehicles in urban markets managed growth.
The report also said that the India-Europe Free Trade Agreement and new EV policies can further strengthen this sector in the coming times.
The passenger vehicle segment also witnessed improvement, where companies grew sales in a balanced manner and customers opted for better and premium options within their budget range.
–IANS
DBP