TL;DR
Nuvama's report forecasts sustained growth for the Indian auto sector from FY26-28, with passenger vehicles and two-wheelers leading the expansion due to domestic demand, new products, and financing.
India's automotive sector is poised for sustained growth over the fiscal years 2026-2028, with passenger vehicles (PVs) and two-wheelers expected to demonstrate stronger growth trajectories compared to heavy commercial vehicles (HCVs) and tractors. A research report by Nuvama forecasts a domestic industry volume Compound Annual Growth Rate (CAGR) of 8% for PVs and 6% for two-wheelers during this period.
The near-term outlook for May 2026 indicates a broad-based continuation of the wholesale uptrend, driven primarily by domestic demand factors. This sustained growth is attributed to improved affordability, the introduction of new products, seasonal wedding demand, and ample financing availability. While export growth is projected to remain positive for most Original Equipment Manufacturers (OEMs), some pressure on shipments to the Middle East is anticipated. Domestic passenger vehicle volumes are expected to expand by over 20% year-on-year in May 2026.
