Dealers across India are cautiously optimistic about retail sales in FY26, with the Federation of Automobile Dealers Associations (FADA) projecting mid to high single-digit growth in the two-wheeler segment and low single-digit growth for both passenger vehicles and commercial vehicles.
On the one hand, a combination of upcoming model launches and renewed interest in electric vehicles is expected to give a boost to the market sentiment, dealers foresee some headwinds such as financing and a looming threat of economic slowdown on the other. Though brrowing costs may comedown with further rate cuts by RBI are expected in the months to come, credit norms have tightened in recent months, which may again hamper sales.
Besides, extended price hikes from OBD-2B norms, which are BS-VI phase II emission norms that kicked in from 1 April 2023 will continue to impact vehicle sales.
Adding to the uncertainty is the spectre of a global tariff war, which could spark stock market turbulence and erode returns on mutual fund SIPs. If investors see their disposable incomes shrink in tandem with market volatility, discretionary spending like auto purchases may well suffer, claims a FADA statement. Within the passenger vehicle segment, new launches and strategic marketing can offer a lift, but widespread concerns remain about subdued consumer sentiment.
In CVs, the picture is similar with dealers expecting only a modest pickup in segments like school buses and passenger carriers while freight demand remains patchy. Overall, despite the prospect of incremental growth, the health of the auto sector will hinge on how effectively stakeholders manage financing challenges, adapt to a shifting global trade environment and better inventory management.
April sales to be flat and over a third foresee some growth — driven partly by regional festivals and the marriage season. Yet, the picture is far from rosy: nearly 60 per cent of dealers across all segments report weak booking pipelines, signalling a fragile foundation on which any optimism must rest.
Within the delicate balance, each vehicle category faces its own blend of hopes and hurdles. Two-wheeler dealers anticipate a lift from festive buy-ins and marriage-season demand, but they remain wary of rising OBD2B costs, weak rural liquidity, and mounting competition from electric vehicles. Meanwhile, passenger vehicle showrooms look to pipeline bookings and regional celebrations — such as Akshay Tritiya, Bengali New Year, Baisakhi, Vishu etc — to sustain momentum, even as many wrestle with surplus inventory and poor consumer confidence.
Commercial vehicle retailers, bolstered by ongoing infrastructure projects and school-bus needs, hope to maintain the tempo of a strong March, but heatwave disruptions and global trade anxieties could quickly stall the momentum. By mid-month, it will become clearer whether this mix of cautious optimism and underlying fragility can carry the industry through — or if the intense pressures of summer and an unsteady global outlook will prompt another round of recalibration.
Two-Wheelers in rural markets grew by 8.39 per cent, comfortably outpacing the urban growth of 6.77 per cent, while Three-wheelers saw an even higher contrast at 8.70 per cent in rural regions versus just 0.28 per cent in urban. Even Passenger Vehicles posted 7.93 per cent in rural sales, compared to 3.07 per cent in cities.”