- 20 Feb 2025
- ICICIdirect Research
INDIAN CARMAKERS ARE BRACING FOR SLOW DOMESTIC PASSENGER VEHICLE (PV) SALES GROWTH OF ONLY 1-2% IN FY26 CITING WEAK DEMAND...
News: According to media sources, Indian carmakers are bracing for slow domestic passenger vehicle (PV) sales growth of only 1-2% in FY26 citing weak demand, affordability concerns, declining entry level car sales & geopolitical uncertainties. In contrast, 2W OEMs are optimistic and estimate the sales volume to grow by 8-10% in FY26, supported by strong rural demand, Income tax benefits, PM E-drive scheme and seasonal uptick.
View: SIAM believes affordability would be one of the major challenges as increase in vehicle price is more than increase in disposable income of customers. OEMs highlighted different points regarding their outlook for FY26 wherein M&M believes the UV segment is likely to grow by 8% in FY26 while Tata motors project a volume growth of 2-4% in FY26. We believe the consensus growth rate is below expectations and will have a negative impact on auto stocks in opening trade today. This is negative for Maurti Suzuki, Hyundai Motors and Tata Motors in the PV domain while 2-W OEM’s like Bajaj Auto and Eicher Motors will witness gains.
Impact: Negative