Passenger vehicle industry to grow in double digits in H2FY26: Tata Motors' Shailesh Chandra

India’s passenger vehicle volumes are likely to grow in double digits in the second half of the financial year 2025-26 (H2FY26), according to Tata Motors Passenger Vehicle Managing Director and CEO Shailesh Chandra.

“My estimate is that it should be double-digit growth. In FY26, the first half had seen a decline of 1.6% before the festive period. So overall, it should be in the zone of 5% or so,” Chandra said during the carmaker’s second-quarter earnings call.

“In September and October, the industry has grown by 5% and 17%. Even if I take out the festive demand or the pent-up demand, November and December should also be strong,” he said.

The boost in passenger car sales comes after the GST Council slashed the tax rate on cars from September 22, making vehicles more affordable to car buyers.

Passenger vehicle sales de-grew 1.4% year-on-year in the first half of the ongoing fiscal, according to the Society of Indian Automobile Manufacturers (SIAM).

“While the footfall has slowed since the festive period but it is stronger that what we see in November. That remains strong which indicates that there will be growth versus last year,” said Chandra.

After the GST reforms, the compact SUV segment, which comprises SUVs that are less than four metres in length, is seeing greater traction. “The Punch and the Nexon have done significant retails in September and October. This clearly indicates that these two segments have been a strong beneficiary of GST2.0. The steepest drop in terms of percent reduction has come in less than four metres cars,” said Chandra. Nexon became India’s top-selling car in October 2025.

Maruti Suzuki chairman R.C. Bhargava, too, believes that growth in the second half of this fiscal will be substantially higher than the first. “Instead of a degrowth of 1.4%, I expect the industry to record overall growth of around 6% in the second half,” Bhargava said in a media conference call after India’s biggest carmaker announced its second quarter results.

Bhargava, however, expects compact cars to clock double-digit volume growth. “I am sure this heavy rate of growth, which we have witnessed, cannot sustain. But I also expect that in the small car segment, which means the 18% segment, I do expect that double digit growth should be possible for some period to come in the future,” he said.

“The response in the top 100 cities is phenomenal. But, beyond 100 cities, the bookings are higher than the top 100 cities. If we see 18% GST band, in the top 100 cities, the booking growth is close to 50%. But if we see beyond 100 cities, it is close to 65%,” he said.