New Delhi: India’s automobile sector is witnessing a demand-driven recovery in FY26, led largely by strong performance in the two-wheeler segment, according to a report by Deloitte India.
The report highlights that two-wheelers emerged as the key growth driver, with wholesale volumes rising 10.7 percent year-on-year and retail sales registering a robust 13.4 percent increase. This surge reflects improving urban demand and a noticeable shift toward premium models.
Across the auto industry, recovery has been uneven. While urban markets and premium segments have gained traction, rural demand continues to face challenges. Passenger vehicles are seeing a clear premiumisation trend, with mid-sized entry segments expanding their share, while traditional entry-level categories remain under pressure.
Commercial vehicles, meanwhile, have entered a goods-led growth cycle, expanding by around 12.6 percent year-on-year. This growth is being supported by ongoing infrastructure development and replacement demand.
Electric vehicle (EV) adoption is also picking up pace, though inconsistently. While there is strong growth across segments, overall penetration remains limited due to cost concerns and gaps in charging infrastructure. In the two-wheeler category, electric models grew by 21.8 percent, but their total market share increased only modestly to 6.5 percent.
The report also notes a significant shift within the two-wheeler market itself. Demand for premium motorcycles surged by over 40 percent, while scooter sales rose by 18.5 percent, indicating changing consumer preferences.
At the state level, Kerala recorded the highest EV penetration at 14.1 percent, followed by improving adoption in Karnataka and Odisha. Maharashtra, despite higher volumes, saw its share decline to 9.2 percent as demand for conventional internal combustion engine vehicles rebounded.
Policy support is expected to play a crucial role going forward, with developments such as the proposed India–EU free trade agreement and evolving EV policies likely to shape the sector’s medium-term outlook.
Overall, while challenges persist in entry-level segments and rural markets, rising demand for premium vehicles and feature-rich upgrades in urban areas continues to anchor the industry’s recovery.
With inputs from IANS
