India's automobile makers reported broad volume growth in August 2026, with Vahan registration data showing a 17.3% year-on-year increase. According to a report by Mirae Asset Sharekhan, most original equipment manufacturers (OEMs) posted double-digit growth, with the exception of Hero MotoCorp and M&M's tractor division.
The report attributes part of the increase to a low base from August 2025, when companies had cut dispatches ahead of the GST 2.0 rate cut. Despite price increases by most manufacturers to offset input cost inflation, domestic demand held up. Dealers appear to be building inventory ahead of the festive season.
Commercial Vehicles
Commercial vehicle dispatches grew across the board, with domestic wholesale volumes up 20-43% among the four major listed manufacturers: Tata Motors, Ashok Leyland, Eicher and M&M. Including exports, total volumes rose 49% at Tata Motors CV, 38% at Ashok Leyland, 18% at Eicher and 24% at M&M, year-on-year. The report cites infrastructure spending, freight availability, and replacement demand for heavy trucks as drivers. Exports rose for Tata Motors but declined for Ashok Leyland and Eicher.
Passenger Vehicles
Passenger vehicle dispatches showed a split between SUV-focused lines and entry-level cars. Domestic volumes rose 29% at Maruti Suzuki, 42% at M&M and 59% at Tata Motors, year-on-year. Electric vehicles made up about 26% of Tata Motors' passenger vehicle volumes and roughly 9% of the category overall. Exports climbed to 15% of Maruti's total volumes, up from 12% in July, though the report flags continued export pressure linked to disruptions in West Asia. M&M's monthly run rate stayed close to 60,000 units.
Two-Wheelers
Two-wheeler sales grew on both export recovery and domestic demand. Electric two-wheeler penetration reached about 9.5% of total sales. Bajaj Auto's two-wheeler volumes rose 30% year-on-year, with exports accounting for 54% of that total. TVS Motors reported the strongest performance among listed players, with total sales up 21%, domestic two-wheeler sales up 18%, and electric two-wheeler sales up 137% to 59,453 units. Royal Enfield volumes rose 11%. Combined, TVS, Bajaj, Ather and Hero's Vida brand posted electric two-wheeler growth of 91%, 235%, 49% and 38% respectively, based on Vahan data, together accounting for about 76% of the electric two-wheeler market. Hero MotoCorp lagged its peers, maintaining an average monthly run rate above 5.5 lakh units, though its exports fell 25%.
Tractors
Tractor sales growth slowed compared to earlier in the fiscal year. Escorts Kubota sold 10,072 units, up 19.1% year-on-year, with domestic sales up 20.5% to 9,523 units and exports roughly flat at 549 units. M&M's farm equipment division grew 5% to 29,507 units, down from 21% growth in July and 12% in June. Both companies pointed to improving rainfall, near-normal kharif sowing, and government support schemes as factors behind continued growth, while noting the pace has eased from the base effects seen earlier in the year. Escorts said in its commentary that a strong year-ago base could limit further growth.
Sharekhan maintains a "Positive" view on the auto sector, with "Buy" ratings on most listed OEMs, including Bajaj Auto, Eicher Motors, Hero MotoCorp, M&M, Maruti Suzuki, Tata Motors (CV and PV), and TVS Motors. Ashok Leyland carries a "Hold" rating.