India’s automobile industry recorded strong growth across passenger vehicles, two-wheelers, three-wheelers and commercial vehicles in the second quarter of FY2026-27 (July–September 2026), according to the Society of Indian Automobile Manufacturers (SIAM). Improved affordability following GST 2.0, resilient demand, infrastructure spending, healthy freight movement and vehicle replacement demand supported the industry’s performance.
All four major vehicle segments registered their highest-ever second-quarter sales during the period, SIAM said.
Q2 FY2026-27: Segment-Wise Sales Performance
Passenger Vehicles
Passenger vehicle sales reached 13.60 lakh units in Q2 FY2026-27, registering growth of 30.7% compared with the corresponding quarter of the previous financial year.
Utility vehicles continued to dominate the segment, accounting for 68% of total passenger vehicle sales and recording growth of 34.2%. Passenger car sales also increased by 24.9%.
SIAM attributed the growth to improved affordability following GST 2.0, a lower base in the previous year, new vehicle launches, alternative-fuel technologies, electric vehicles, financing support, resilient rural demand and healthy festive-season purchases.
Passenger vehicle exports, however, declined by 5.2% to 2.29 lakh units, primarily due to a higher base and logistics constraints associated with the West Asia crisis.
Two-Wheelers
Two-wheeler sales grew by 15.2% to 64.33 lakh units during the quarter. Growth was supported by improved affordability after GST 2.0, a low base in the previous year and an emerging replacement cycle across markets.
Scooters led the segment with growth of 27.7%, while motorcycle sales increased by 7.4%.
Two-wheeler exports reached 16.5 lakh units, registering growth of 27.7% and marking the segment’s highest-ever second-quarter export performance.
Three-Wheelers
Three-wheeler sales increased by 23.6% to 2.85 lakh units in Q2 FY2026-27.
Domestic demand benefited from improved affordability for internal combustion engine models following GST reforms, growing adoption of higher-quality L5 electric three-wheelers and expansion in cargo applications across fuel types. Increasing last-mile mobility requirements and favourable total cost of ownership also supported demand.
Three-wheeler exports reached 1.6 lakh units, growing by 30.4% year-on-year and setting a new second-quarter record.
Commercial Vehicles
Commercial vehicle sales rose by 28.7% to 3.09 lakh units during the quarter.
SIAM attributed the growth to infrastructure spending, strong freight movement, replacement demand for ageing trucks and buses, and logistics fleet expansion.
Commercial vehicle exports exceeded 41,000 units, registering growth of 72.5% compared with Q2 of the previous financial year.
Automobile Production and Domestic Sales
India’s total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles reached 1,05,57,400 units during July–September 2026.
The following table summarises domestic sales across the major vehicle segments.
| Vehicle segment | Q2 FY2026-27 domestic sales |
| Passenger vehicles | 13,60,687 |
| Commercial vehicles | 3,09,063 |
| Three-wheelers | 2,85,342 |
| Two-wheelers | 64,32,842 |
In September 2026, total production of passenger vehicles, three-wheelers, two-wheelers and quadricycles stood at 34,52,554 units. Domestic sales during the month included 4,54,574 passenger vehicles, 98,162 three-wheelers and 24,63,103 two-wheelers.
For April–September 2026, cumulative production across passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles reached 1,99,46,193 units.
Domestic sales during the first half of FY2026-27 stood at:
| Vehicle segment | April–September 2026 sales |
| Passenger vehicles | 26,37,067 |
| Commercial vehicles | 5,74,255 |
| Three-wheelers | 5,01,879 |
| Two-wheelers | 1,20,86,812 |
SIAM noted that certain manufacturers’ data were unavailable for specific reporting categories. The reported production and sales totals therefore reflect the data coverage specified in its release.
SIAM Expects Positive Growth in H2 FY2026-27
SIAM expects the automobile industry to maintain positive growth momentum during the second half of FY2026-27, covering October 2026 to March 2027. However, year-on-year growth rates could moderate as the industry begins comparing performance against a higher base.
Passenger vehicle demand is expected to receive support from new launches and the festive season. Two-wheelers are likely to benefit from festive demand and improving underlying market conditions, although growth could moderate against the stronger post-GST base.
Three-wheelers are expected to maintain healthy demand, supported by cargo applications, last-mile mobility requirements and favourable ownership costs. Inflationary pressures and potential interest-rate increases could nevertheless affect demand.
Commercial vehicles are expected to benefit from infrastructure investments, fleet replacement and demand generated by the PARIVARTAN scheme.
SIAM also highlighted geopolitical developments and rising inflation as factors that could affect the industry’s performance. Despite these uncertainties, the association expects the sector to close FY2026-27 on a positive growth trajectory.
Commenting on the industry’s performance, Shenu Agarwal, President, SIAM, said the first half of FY2026-27 delivered strong results, supported by improved affordability following GST 2.0, resilient rural and urban demand, healthy freight movement, infrastructure-led economic activity and a gradual vehicle replacement cycle.
He also highlighted the maturing electric vehicle ecosystem, improving charging infrastructure and growing acceptance of alternative-fuel technologies as important developments in India’s transition towards sustainable mobility.
Agarwal said the industry would look to the festive season to sustain momentum while remaining cautious about prevailing geopolitical and economic uncertainties. Continued infrastructure investment, economic growth and the adoption of cleaner, more efficient mobility solutions are expected to support performance in the second half.
Rajesh Menon, Director General, SIAM, said passenger vehicle sales grew by 30.7% to 1.36 million units in Q2, while three-wheelers increased by 23.6% to 2.85 lakh units. Two-wheeler sales rose by 15.2% to 6.43 million units, and commercial vehicle sales grew by 28.7% to 3.09 lakh units.
Menon added that Q2 FY2026-27 recorded the highest-ever second-quarter sales across all four major vehicle segments: passenger vehicles, commercial vehicles, three-wheelers and two-wheelers.
Outlook
The strong second-quarter performance underscores the contribution of affordability measures, festive demand, infrastructure activity and replacement cycles to India’s automobile market. While higher inflation and geopolitical uncertainty remain potential risks, SIAM expects demand fundamentals to remain supportive through the second half of FY2026-27.
