SIAM Looking Ahead Conclave Estimates India’s FY27 PV Growth at 5-7%, 2W at 6-8%

India’s passenger vehicle and two-wheeler markets are estimated to grow in the range of mid-to-high single digits during the financial year 2027 (FY27), primarily on the back of higher income growth and reduced ownership costs following the recent Goods and Services Tax cut.

According to sources, the SIAM Looking Ahead Conclave, held on Thursday, which brought together OEMs and research houses to discuss factors influencing the market for the year ahead, estimated the passenger vehicle market to grow in the range of 5-7% during the next financial year, while the two-wheeler market is projected to grow between 6-8%.

The growth forecast for the commercial vehicle market is seen in the range of 4-6%, while the three-wheeler market is expected to grow at 9-10%. However, sources noted that these are not official Society of Indian Automotive Manufacturers (SIAM) figures, but a compilation of growth estimates from research firms such as S&P, CRISIL and ICRA.

Last year, the SIAM Looking Ahead Conclave had projected the passenger vehicle industry to grow in the range of 1-4% during the financial year 2026 (FY26). During the April-September period, domestic passenger vehicle sales declined 1.4% year-on-year to 2.05 million units, but the GST cut at the end has renewed growth momentum for the industry. This year’s conclave estimates the domestic volume for the industry in FY26 at around 4.44 million units.

Lower ownership costs following the GST cut, income tax relief and improving consumer sentiment are seen supporting demand in the near term. At the same time, the industry sees the structural drivers of the market remaining intact, with growth coming from both urban and rural areas and a steady flow of first-time buyers. The shift towards higher-value vehicles is also expected to continue, led by SUVs, with compact and mid-size SUVs seen as the fastest-growing segments.

The two-wheeler industry is also seen getting support from better income growth, lower costs of ownership and borrowing. Growth is expected to be broad-based across entry-level, executive and premium segments. Demand at the entry level is being supported by pent-up buying and the steady addition of first-time customers.

During the first nine months of FY26, domestic two-wheeler sales grew 5.9% to 15.93 million units, and growth for the full year is projected to be in the mid-to-high single digits. Electric vehicle penetration is expected to improve to 7-8% in FY27 from the current 6.5%.