India's passenger vehicle (PV) segment closed the first quarter of FY 2026-27 on its strongest footing yet, according to data released by the Society of Indian Automobile Manufacturers (SIAM). Domestic sales touched 12,73,811 units between April and June 2026, up from 10,11,884 units in the same period last year, a growth of 25.9%, marking the segment's best-ever Q1 performance.
Utility Vehicles Pull Ahead of Cars
The rally was led by utility vehicles (UVs), which grew 28.6% year-on-year to 8,61,918 units and now account for roughly 68% of total PV sales. Passenger cars grew at a slower but still healthy 21.3%, rising to 3,67,549 units, while vans posted the smallest gain among the three categories at 14.8%, reaching 44,344 units.
The shift underscores a continuing consumer preference for UVs over traditional sedans and hatchbacks, a trend that has steadily reshaped the PV mix over recent years.
June Alone Posts Double-digit Growth
The momentum was visible in the standalone month as well. Total PV sales in June 2026 stood at 3,88,144 units, a 24.1% increase over June 2025's 3,12,851 units. Excluding Tata Motors — whose detailed monthly break-up was not available — the comparison stands at 2,75,768 units in June 2025 versus 3,26,068 units in June 2026, still reflecting strong underlying growth.
Exports Also at a Record High
PV exports touched 2.22 lakh units in Q1 FY27, up 8.8% from the previous year and the highest-ever export volume for the segment in a first quarter. Demand from Latin America was a key driver, alongside a pickup in orders from Europe and Japan, even as exports to the Middle East came under pressure amid regional disruptions.
Industry View
Commenting on the numbers, SIAM President Shailesh Chandra said the strong showing across vehicle segments came despite headwinds from disruptions in West Asia, and credited supportive domestic demand, lower GST rates, softer financing costs, a low base effect and new model launches for the performance. He added that the industry continues to track geopolitical developments and monsoon progress closely, given their bearing on rural demand.
Director General Rajesh Menon noted that all vehicle segments recorded high double-digit growth in Q1, with PV sales growing 25.9% over the same quarter last year.
Outlook for Q2
SIAM's outlook for the July-September quarter points to continued demand, supported by the lower vehicle costs stemming from GST 2.0 and easier financing availability. Improved rainfall in late June and early July has eased monsoon deficiency concerns to some extent, while inflation has remained within manageable levels. The onset of the festive season is expected to sustain demand further.
However, the industry flagged commodity costs as a continuing pressure point, and said it is monitoring recent developments in West Asia closely, even though an earlier ceasefire had helped ease the supply of gas, fuel and other commodities.