SIAM remains cautiously optimistic as Q1 auto sales remain flat

The automobile industry remains cautiously optimistic amidst geopolitical tensions and supply-chain constraints owing to rare earth magnet exports from China, according to the Society of Automobile Manufacturers (SIAM).

In the April to June quarter of FY26, the passenger vehicle sales declined by 11.2% year-on-year to 3,02,991 units as against 3,41,293 units in the same period last year, owing to a decline in urban demand, according to the latest data of SIAM. In June, the passenger vehicle sales slid to an 18-month low, declining by 7.4% YoY to 3,12,849 units as against 3,37,757 units in the same period last year.

“The performance of the auto industry was relatively flat, though the retail registration for passenger vehicles, two-wheelers, and three-wheelers was marginally higher than the previous Q1. Overall sentiments across categories have remained subdued so far, even as the industry continues to navigate supply-side challenges. With the upcoming festival season coupled with the benefits of RBI repo rate cuts, we expect consumer sentiments to improve,” says Shailesh Chandra, President, SIAM.

Amongst passenger vehicles, the share of utility vehicles accounted for 66%. In Q1 of FY26, the utility vehicles grew by 3.8%, whereas the passenger cars segment witnessed a decline of 11.2% year-on-year.

Notably, the passenger vehicles recorded the highest ever exports in Q1 of 2025-26 of 2.04 lakh units, registering a growth of 13.2% over Q1 of 2024-2,5, owing to a stable demand across most markets, with strong performance in the Middle East and Latin America.

“Revival in neighbouring markets like Sri Lanka and Nepal, rising demand from Japan, and growing exports under FTAs such as Australia also contributed to the overall uptick,” says SIAM.

Meanwhile, the two-wheeler industry witnessed a degrowth of 6.2% YoY to 46,74,562 units as against 49,85,631 units in the same period last year. The third-wheeler sales saw a marginal growth of 0.1% to 165,211 units, as against 165,081 units in the same period last year. The commercial vehicle sales declined marginally by 0.6% to 2,23,215 units as against 2,25,575 units in the same period last year.