MUMBAI, May 29, 2025 — Despite a sequential decline in electric two-wheelers (e2W) to about 91,800 units in April 2025 compared to 130,274 units in March 2025, ratings agency ICRA has stated that EV penetration in the 2W segment remains between 5 and 6% monthly.
ICRA projects a 6-9% wholesale volume growth for the two-wheeler market as a whole in FY2026, supported by stable replacement demand, an anticipated rebound in urban demand, and robust rural incomes brought on by early signs of a typical monsoon.
India’s export volumes of two-wheelers are still increasing, albeit slowly; monthly export volumes showed a robust 14.8% growth.
Providing the passenger vehicle forecast. Due to changes in the income tax structure, ICRA has predicted that domestic industry volumes will grow by 4-7% in FY2026. This growth is expected to be driven by a resurgence in demand and higher disposable income. However, high dealership inventory levels may have an effect on production and wholesale volumes. This is in contrast to the introduction of new models and ongoing OEM discounting offers, which caused some dealership inventory levels to moderate.
As reported by the Federation of Automobile Dealers Association (FADA), inventory levels at auto dealerships remained high at approximately 50 days by the end of April 2025.
Regarding form factor, India still relies heavily on SUVs. Sport utility vehicles (SUVs) remained the most popular segment in the passenger vehicle (PV) industry, accounting for 64–65% of total PV volumes, according to ICRA. Shortly, utility vehicles (UVs) are probably going to continue to be the main volume drivers. Maintaining demand following the recently ended wedding season is crucial for controlling inventory levels and giving dealers a buffer of liquidity.
After a slight 1.2% YoY decline in FY2025, ICRA projects the domestic CV industry to record a modest YoY growth of 3-5% in wholesale volumes in FY2026 in the medium and heavy commercial vehicle (M&HCV) segment. In FY2026, the M&HCV (trucks) and LCV (trucks) segments are anticipated to experience limited year-over-year volume growth of 0-3% and 3-5%, respectively.
For the fiscal year, the buses segment is anticipated to grow at a comparatively higher rate of 8–10% YoY. While reporting a sequential increase of 7.3%, retail sales volumes in April 2025 saw a pitiful 0.2% YoY decline.
Following a 4.0% decrease in FY2025, the M&HCV (trucks) wholesale volumes are anticipated to show a modest 0-3% YoY growth in FY2026.
