Passenger vehicle sales drop 1.4% to 10.11 lakh units in April-June

Mumbai: Domestic passenger vehicle sales declined 1.4 per cent to 10,11,882 units in the first quarter of this fiscal from 10,26,006 in the corresponding quarter of last fiscal, Society of Indian Automobile Manufacturers (SIAM) said on Tuesday.

Total two-wheelers sales also fell by 6.2 per cent to 46,74,562 units during the April-June quarter compared to 49,85,631 units in the period a year earlier. The commercial vehicle (CV) saw a marginal 0.6 per cent fall in sales to 2,23,215 units in the June quarter of the current fiscal from 2,24,575 units in the first quarter of the previous fiscal.

The three-wheeler segment, however, logged a marginal growth of 0.1 per cent at 1,65,081 units in the first quarter of FY 26 against 1,65,211 units in the April-June period of last fiscal, SIAM said at a media briefing here.

"Passenger vehicle sales in Q1 of 2025-26 de-grew by (-) 1.4 per cent, posting sales of 1.01 million units as compared to Q1 of the previous year. Sales of three-wheelers in the first quarter grew marginally by 0.1 per cent compared to last year, with 1.65 Lakh units, which is the highest ever in Q1," said Rajesh Menon, Director General at SIAM.

Passenger vehicle sales have crossed the 1-million mark in the first quarter for the second time in the last two years, the automobile industry body said and added that due to lower sales in the later part of the quarter, the Q1 volumes were lower by a negative 1.4 per cent as compared to Q1 of 2024-25.

"The performance of the auto industry was relatively flat, though the retail registrations for passenger vehicles, two and three-wheelers were marginally higher than the previous quarter," SIAM President Shailesh Chandra said.

Overall sentiments across categories have remained subdued so far, even as the industry continues to navigate supply-side challenges, he said.

"With the upcoming festival season coupled with the benefits of RBI repo rate cuts, we expect consumer sentiments to improve," Chandra added.

The share of utility vehicles (UVs) in the PV segment has now grown to 66 per cent, SIAM said, adding UVs posted a growth of 3.8 per cent year on year in the first quarter, while the passenger cars segment has degrown by (-) 11.2 per cent over Q1 of 2024-25.

Passenger vehicles saw their highest ever exports in the quarter under review with 2.04 lakh units, registering a growth of 13.2 per cent over the same quarter last year, SIAM said.

Export growth in this segment was driven by stable demand across most markets, with strong performance in the Middle East and Latin America. Revival in neighbouring markets like Sri Lanka and Nepal, rising demand from Japan, and growing exports under FTAs such as Australia also contributed to the overall uptick, the automobile industry body said.

Looking ahead to Q2, SIAM said, the overall industry outlook remains cautiously optimistic.

While the challenges from the first quarter may continue to linger in the near term, several positive macroeconomic and seasonal indicators could support a gradual recovery. The upcoming festive season typically serves as a demand driver, particularly for PVs and two-wheelers, and could help uplift consumer sentiments, it said.

It also said that an above-normal monsoon is likely to aid rural income recovery, which is especially important for two-wheelers and entry-level vehicles that rely heavily on rural demand, adding that the RBI's cumulative repo rate cuts of 100 basis points over the past six months are expected to gradually ease borrowing costs which could positively impact the auto sector by improving affordability and boosting consumer sentiment in the coming months.

However, supply-side challenges, especially the recent export licensing requirement from China on rare earth magnets, have been a concern for OEMs of all categories, SIAM said.