TL;DR
Nomura's May 2026 auto preview suggests that recent fuel price hikes and inflation will likely temper India's overall automotive demand across passenger vehicles, two-wheelers, and commercial vehicles, despite current healthy sales.
The Indian automotive market is bracing for a potential moderation in demand across all segments in the coming months, largely due to the combined impact of recent fuel price hikes, vehicle price increases, and inflation. Despite healthy current sales momentum, a Nomura May 2026 auto sector preview indicates that affordability pressures are beginning to build for consumers.
While passenger vehicle wholesales are still projected to grow 24% year-on-year in May 2026, and two-wheeler wholesales by 10%, the report highlights a significant acceleration in EV adoption as a direct consequence of rising fuel prices and supportive government policies. Passenger vehicle EV penetration is estimated at 6.4% in May 2026, a notable increase from previous fiscal years. Conversely, the commercial vehicle segment is expected to face pressure, with rising diesel prices and higher ownership costs likely to sharply impact demand.
