India’s passenger vehicle industry recorded strong year-on-year growth in April 2026, supported by revised GST rates, sustained demand for newly launched models and the extended summer wedding season, according to a report by ICRA.
The ratings agency said passenger vehicle wholesale volumes increased 25% year-on-year to 4.4 lakh units in April 2026 as OEMs maintained production levels to meet domestic demand. On a sequential basis, wholesale dispatches remained largely steady.
Retail sales also grew 16% year-on-year during the month, aided by demand for new models and the continued impact of lower GST rates. However, retail volumes declined compared to March 2026, when higher discounts had supported year-end sales momentum.
Inventory Levels Improve
ICRA noted that dealer inventory levels remained lower at 28-30 days in April 2026, compared to 50 days in April 2025 and 60 days in September 2025, citing data from the Federation of Automobile Dealers Associations (FADA). The reduction was attributed to stronger retail offtake.
Utility vehicles continued to dominate the market, accounting for 68% of total passenger vehicle volumes in FY2026. The report added that mini, compact and super-compact segments saw a marginal recovery following the GST rate revisions.
Export Momentum Continues
Passenger vehicle exports also recorded growth, rising 13% sequentially in April 2026. ICRA said the increase reflects continued supply push from Indian OEMs in overseas markets.
Maruti Suzuki India retained its position as the country’s largest passenger vehicle exporter in FY2026 with a 49% share of exports, followed by Hyundai Motor India.
FY2027 Outlook
ICRA expects passenger vehicle wholesale volumes to grow 4-6% in FY2027, supported by steady demand conditions, new model launches and the impact of GST rate cuts.
The report, however, noted that the elevated base of FY2026 and concerns around a weak monsoon could moderate growth. It also identified the ongoing West Asia crisis and its potential impact on inflation and consumer sentiment as key factors to monitor.