Indian auto industry faces subdued FY26 growth amidst weak demand: Report

New Delhi [India], July 25 (ANI): The Indian auto industry is expected to experience subdued growth in FY26, with most segments anticipating low to mid-single-digit growth, as revealed in a recent report by Motilal Oswal.

Motilal Oswal report believes that the Indian Automobile industry is likely to witness just 6-7 per cent of growth rate for FY26.

The report further reveals that a key challenge lies in the two-wheeler segment, where the current growth estimates carry a downside risk if demand doesn't pick up momentum in the near future.

At present, the key auto segments are facing weakness in demand, which has led to passenger vehicles posting a decline of 1.4 per cent, while two-wheeler ICE registered a decline of 8 per cent in volumes. Additionally, the commercial vehicle segment also booked marginal declines.

Specifically, in the two-wheeler segment, motorcycle sales recorded a 9 per cent YoY decline, scooter ICE sales recorded a 5 per cent decline, and mopeds recorded an 11 per cent YoY decline.

Additionally, the report also reveals that the car segment posted an 11 per cent YoY decline in Q1, with all players witnessing a decline in volumes. Precisely, the small car segment saw a significant decline in volumes: Alto (-36 per cent), Spresso (-38 per cent), and Celerio (-43 per cent).

However, Nalinikant Gollagunta, CEO Automotive Division, MM, believes that "confident of mid to high teens growth in SUVs, strong double digit growth in exports and will stick to guidance of high single digit growth for LCVs for FY26."

According to the report, in the CV segment, while MHCV (Medium and Heavy Commercial Vehicles) goods declined 4.5 per cent, LCV (Light Commercial Vehicle) goods marginally declined 0.5 per cent for Q1FY26. Bus continued to witness steady demand, with MHCV buses growing 7.6 per cent and LCV buses growing 8.8 per cent.

In the commercial vehicle segment, Tata Motors Limited underperformed in all four CV segments, while VECV VE Commercial Vehicles Limited outperformed in most of the CV segments in Q1. (ANI)

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