India’s Q1 Passenger Vehicle Sales Cross One Million for Second Consecutive Year

New Delhi: India’s passenger vehicle sales crossed the one million mark in the first quarter (April–June) of the 2025–26 financial year for the second year in a row, with exports showing strong double-digit growth, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday.

“Passenger vehicles — which include cars and utility vehicles — recorded their highest-ever Q1 exports at 2.04 lakh units, marking a 13.2% increase over Q1 of 2024–25,” SIAM said in a statement.

The surge in exports was attributed to steady demand across major markets, with notable contributions from the Middle East and Latin America. Additionally, the revival of demand in neighboring countries like Sri Lanka and Nepal, growing interest from Japan, and increasing shipments under Free Trade Agreements (FTAs), including with Australia, also fueled growth.

Two-wheeler exports rose sharply to 1.14 million units in Q1, registering a 23.2% year-on-year increase. The recovery in regional markets and continued momentum in key international markets played a major role.

Three-wheeler exports also saw impressive growth, rising by 34.4% to 96,000 units, while commercial vehicle exports grew 23.4%, reaching nearly 20,000 units.

While overall Q1 passenger vehicle sales exceeded one million units for the second straight year, sales were slightly down by 1.4% at 1.01 million units compared to the same quarter last year, due to softer demand in the latter part of the quarter.

Domestic two-wheeler sales stood at 4.67 million units, registering a 6.2?cline year-on-year, largely due to inventory corrections across the industry. However, retail registrations of two-wheelers increased by 5% in Q1, driven by seasonal marriage-related demand and improving consumer sentiment.

Scooters gained market share within the two-wheeler segment, increasing by 2.15% over last year’s Q1.

The three-wheeler segment reported its best-ever Q1 domestic sales, reaching 1.65 lakh units, with growth driven primarily by the passenger carrier sub-segment. Increased economic activity, urban transport demand, and easier financing have supported the segment’s sustained performance.

Retail registration of three-wheeler cargo vehicles also showed continued strength, reflecting growing intracity logistics demand.

The commercial vehicle segment posted a slight decline of 0.6% year-on-year, with 2.23 lakh units sold. However, within this category, passenger commercial vehicles posted positive growth, indicating steady momentum in public transport needs.

Looking ahead to Q2, SIAM said the industry maintains a cautiously optimistic outlook. While challenges from the first quarter may persist, positive macroeconomic trends and seasonal factors — such as the upcoming festive season — are expected to boost demand for both two-wheelers and passenger vehicles.

An above-normal monsoon could also support rural income recovery, benefiting demand for entry-level vehicles and two-wheelers. Meanwhile, the Reserve Bank of India’s 100 basis point cumulative rate cuts over the last six months are expected to reduce borrowing costs and improve vehicle affordability.

However, the auto sector is closely watching developments on the supply side, especially concerns around China’s new export licensing requirements for rare earth magnets — a key component for electric and hybrid vehicles.

With inputs from IANS