Festive stocking, tax relief and GST cuts to drive auto demand in H2FY26; September sales show mixed trend
India’s car and bike makers are stepping into the second half of fiscal year 2026 with a mix of hope and caution. Experts point to upcoming festive shopping sprees, lower GST rates on vehicles, and income tax breaks as key drivers that could lift buyer interest and spark demand in the Indian automobile industry.
September sales numbers tell a story of ups and downs. Two-wheelers, three-wheelers, trucks, and tractors all posted solid gains compared to last year, but passenger vehicle sales dipped slightly year-over-year (YoY). Still, month-over-month (MoM) figures showed recovery across the board, according to a fresh report from Axis Securities.
In the two-wheeler and three-wheeler space, things looked bright for domestic sales. Two-wheeler numbers climbed 6% YoY and a whopping 18% MoM, thanks to standout performers like Royal Enfield (up 43% YoY), Suzuki Motorcycle (37% YoY), and TVS Motor (12% YoY). Exports held strong too, rising 17% YoY and 2% MoM, with Bajaj Auto, Hero MotoCorp, Royal Enfield, and TVS leading the charge.
Three-wheeler sales revved up 12% YoY and 6% MoM. Mahindra & Mahindra (M&M) and TVS stole the show here, with gains of 30% and 60% YoY, respectively.
Passenger vehicles faced some headwinds, with wholesales down 5% YoY. But sales bounced back 16% MoM as companies cleared old stock and benefited from GST cuts. Bright spots included JSW MG Motor (up 47% YoY) and Tata Motors (45% YoY), followed by Toyota Kirloskar (31% YoY) and M&M (10% YoY). Maruti Suzuki saw a 6% YoY drop in domestic sales, while Hyundai stayed flat. Tata’s passenger vehicle sales jumped 45% YoY overall, M&M’s rose 10% YoY, and Maruti’s improved 2% MoM.
Tractor sales roared ahead with a massive 50% YoY surge and 124% MoM jump, fueled by strong monsoons and fuller reservoirs that promise better farming seasons. M&M’s tractor numbers soared 50% YoY and 148% MoM, Escorts Kubota climbed 49% YoY and 125% MoM, and VST Tillers and Tractors gained 42% YoY despite a 27% MoM dip.
Commercial vehicles kept the momentum going, with domestic sales up 11% YoY and 19% MoM. Tata Motors and M&M hit mid-teens growth, Ashok Leyland rose 9% YoY, and Eicher Motors’ VECV unit improved 6% MoM after staying flat YoY. Maruti Suzuki’s commercial sales fell 7% YoY.
Looking ahead, Axis Securities stays cautiously optimistic about the rest of FY26. They expect high single-digit growth in passenger vehicles and steady demand for commercial vehicles, powered by festive demand, GST reductions, rural economic recovery, and exciting new model launches in the Indian automobile industry. Tractor sales should stay strong too, supported by a solid kharif harvest and healthy water levels in reservoirs.
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