ICRA said passenger vehicle wholesale volumes rose 24% year-on-year to 3.9 lakh units in June 2026.Electric vehicle (EV) penetration in India’s passenger vehicle market increased to around 6.5 per cent in the first quarter of FY2027, up from 4.6 per cent in FY2026, driven partly by elevated fuel prices, even as rating agency ICRA projected overall wholesale industry volume growth to moderate to 4-6 per cent in the current fiscal.
The agency expects the moderation in growth after a strong first quarter to reflect the elevated base of FY2026, normalisation of pent-up demand, rising vehicle costs and the possibility of a weak monsoon affecting rural demand.
ICRA said passenger vehicle wholesale volumes rose 24 per cent year-on-year to 3.9 lakh units in June 2026 as automakers maintained production to meet domestic demand, while retail sales increased 38 per cent on a low base, supported by GST rate cuts, an extended summer wedding season and demand for recently launched models.
For the April-June quarter, wholesale dispatches grew 26 per cent, while retail registrations increased 31 per cent year-on-year.
UVs continue to dominate
Utility vehicles accounted for around 68 per cent of passenger vehicle sales during the first quarter of FY2027, reaffirming their position as the industry’s primary growth driver. However, ICRA noted that the mini, compact and super-compact car segments have shown signs of recovery following the reduction in GST rates, and passenger car demand is expected to improve further. Dealer inventory also improved, with stock levels reducing to 32-34 days in June 2026 from 55 days a year earlier, aided by stronger retail offtake, according to Federation of Automobile Dealers Associations (FADA) data cited by ICRA.
Exports remained broadly stable during the month, with Maruti Suzuki retaining its leadership position by accounting for more than 55 per cent of passenger vehicle exports in the first quarter, followed by Hyundai Motor India.
While maintaining a positive outlook for FY2027, ICRA cautioned that rising input costs could result in higher vehicle prices, while delayed monsoons could dampen rural demand and weigh on industry volumes in the coming quarters.
