Synopsis

Domestic passenger vehicle dispatches hit an all-time high in the first quarter of FY27. Two-wheeler and three-wheeler dispatches also saw significant year-on-year increases. Commercial vehicles recorded their highest-ever first-quarter sales, reflecting broad growth. Supportive domestic demand and new models aided this strong industry performance. The sector anticipates steady demand entering the festive season.

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Domestic passenger vehicle dispatches from manufacturers to dealers touched an all-time high of 1,273,811 units in the first quarter of FY27, rising 25.9% year-on-year as resilient domestic demand helped the industry navigate disruptions caused by the West Asia conflict, industry body Society of Indian Automobile Manufacturers (SIAM) said on Wednesday.

Passenger vehicle dispatches stood at 1,011,884 units in the corresponding quarter last year. The previous highest first-quarter dispatches were recorded in Q1 FY25 at around 1.03 million units.

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The growth was broad-based across vehicle categories. Two-wheeler dispatches climbed 20.3% to 5,628,675 units during the April-June quarter from 4,677,990 units a year earlier, while three-wheeler dispatches surged 29.7% to a record 214,339 units, compared with 165,211 units in the year-ago period.

Commercial vehicles also posted their highest-ever first-quarter sales, rising 18.3% year-on-year to around 265,000 units, SIAM said.

"The strong performance across segments in Q1 of 2026-27, despite headwinds arising from disruptions in West Asia, can be attributed to supportive domestic demand, aided by lower GST rates, softer financing costs, low base effect and introduction of new models," SIAM President Shailesh Chandra said.

"While overall consumer sentiment and demand remain steady at present, the industry continues to closely monitor geopolitical developments and the progress of the monsoon, given its implications for agricultural output and rural demand," he added.

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The industry also ended June on a strong note. Passenger vehicle dispatches rose 24.1% year-on-year to 388,144 units, up from 312,851 units in June 2025. Two-wheeler sales increased 18.6% to 1,851,400 units, while three-wheeler dispatches climbed 26.1% to 77,951 units.

Looking ahead, SIAM said it expects demand to remain steady as the industry enters the festive season, although commodity costs continue to pose a challenge.

"While the earlier ceasefire in West Asia eased the supply of gas, fuels and other commodities, industry continues to closely monitor the very recent developments," the industry body said.

SIAM noted that lower vehicle prices following the implementation of GST 2.0, coupled with easier financing, have continued to support demand. It also said improved rainfall in late June and early July has helped reduce the monsoon deficit, while moderate inflation has so far not affected vehicle demand during the first quarter.