India's auto sector posts resilient June performance as strong consumer demand drives growth

New Delhi -India's automobile industry maintained strong momentum in June, with demand remaining resilient across most vehicle segments, led by continued strength in personal mobility, according to a report by Asit C Mehta Investment Intermediates.

The report said easing supply-side constraints at several original equipment manufacturers (OEMs), healthy retail demand and sustained export growth helped drive vehicle sales during the month. It also expects exports of two- and three-wheelers to remain a key growth driver in the coming months.

Retail sales of two-wheelers registered faster year-on-year growth across all major manufacturers in June compared to the relatively slower pace seen in May 2026, although wholesale performance remained mixed among OEMs.

According to the brokerage, June was another positive month for the domestic auto industry, with demand holding up well across segments despite macroeconomic uncertainties, geopolitical tensions and recent vehicle price hikes.

The report noted that strong consumer sentiment continued to support retail sales, while exports maintained healthy momentum for most manufacturers. Demand also remained steady despite concerns over rising fuel prices, inflationary pressures and uncertainty surrounding the monsoon.

In the commercial vehicle segment, retail sales growth remained modest, but wholesale volumes recorded robust gains, aided by increased infrastructure activity, replacement demand and a recovery in exports.

The report also projected that tractor demand would remain healthy during the first half of FY27, supported by a favourable base effect. However, the pace of monsoon progress and weather conditions will be key factors influencing demand in the second half of the fiscal year.

Three-wheelers continued to outperform the broader industry, with listed manufacturers once again posting stronger growth than the overall market.

A recent industry report highlighted that domestic two-wheeler sales rose 22 per cent year-on-year to 33.6 lakh units during the April-June 2026 period, while passenger vehicle sales increased about 25 per cent to 12.7 lakh units.

Looking ahead, the report expects domestic passenger vehicle sales to grow at a mid-single-digit rate in FY27. Growth is likely to be supported by improving consumer affordability, increasing adoption of electric vehicles, and the launch of new models, although price increases by OEMs to offset volatile raw material costs could moderate the pace of expansion.

With inputs from IANS