New Reports regarding the Domestic Passenger Vehicle Sales have been showcasing an upward trend for the domestic passenger vehicle sales. The market is expected to grow at a moderate pace of around 4-7% in FY 2026. Most demand drivers have remained neutral and favorable, as per the ratings agency ICRA. As per the new data published with ICRA two-wheelers industry estimates the industry volumes to grow at a healthy pace of 6 to 9% in the financial year 2026. Below the estimated 11-14% growth in Financial year 2025.
Stable Wholesale Volumes
It was in the year 2024 that passenger vehicle volumes reached 4.2 million units. The Wholesale volumes have remained stable led by the steady production by manufacturers. But beyond these facts, the Industry’s overall growth has been showcasing modest trends at 2% against the emergence of waning replacement demand and high inventory hold-up levels. ICRA reported in a statement.
Healthy Retail has been supporting the dealer inventory holdings in the past months. But still, the inventory hold up remains to be pretty high.
“The industry’s growth in FY2025 is expected at 0-2 per cent. Most of the demand drivers for the industry — disposable incomes, new model launches, cost of ownership etc — remain neutral or favorable. Accordingly, even as the base for the industry continues to remain high, ICRA estimates the PV industry volumes to grow at a moderate pace of 4-7 per cent in FY2026,” the rating agency said
The Two-wheeler category has been showcasing strong growth in the current fiscal with about 10% of year-on-year growth in the Financial year 2025. This is a favorable result after the lower levels that were reported during FY2020-FY2022.
Improved rural demand as well as healthy monsoon precipitation have improved the industry’s prospects in the past few years. The rural demand will certainly remain healthy in the upcoming years as well.
ICRA has further reported that improvement in the economic activities, Budgetary support and infrastructure development, freight rates and regulations have helped the push towards cleaner vehicles can further improve the replacement demand.
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