Record sales but West Asia crisis looms over auto industry

The Society of Indian Automobile Manufacturers (SIAM) today announced that all sectors of the Indian Automobile industry — passenger vehicles, two-wheelers, three-wheelers and commercial vehicles all recorded the highest ever sales volume in a financial year for the year ended March 31, 2026.

Passenger vehicles sales touched 46.43 lakh units, a growth of 7.6 per cent from the previous year and two-wheeler sales touched 2.17 crore units with a growth of 10.7 per cent.

Three-wheelers registered a sales growth of 12.8 per cent and Commercial Vehicles 12.6 per cent. Exports also significant growth with passenger vehicle imports touching 9 lakh units and 51.8 lakh two-wheelers were also exported from India.

Speaking to the media in Delhi, Shailesh Chandra, Managing Director, Tata Motors Passenger cars and President, SIAM attributed the growth to multiple factors starting with income tax reform at the start of the year, reduced interest rates and finally the major GST 2.0 reforms in  the second half of the year.

While pointing out that the outlook for the coming year was generally positive with major institutions predicting continued economic growth of between 6.5 - 7.5 percent, the current West Asia crisis is creating some concerns.

This he said could be seen in the spike of demand for electric vehicles in March, “While March does see increased sales due to buyers wanting to take advantage of depreciation benefits, speaking about Tata Motors I can tell you that almost 30 per cent of our electric vehicle buyers were choosing to buy an EV because of concerns with fuel prices going forward.”

He highlighted that SIAM and its members were in constant communication with the Government around the crisis. “While there are no immediate concerns with fuel supplies or with supply chain management, if the war continues, supplies could get constrained and if fuel prices go up, that will certainly have an inflationary impact”, Chandra said. Exports could get impacted because of increased tariffs in Mexico and supply issues to West Asia and North Africa which are major export markets for Indian passenger cars and two-wheelers.

But he said that the industry was still very positive after hitting such sales numbers, and despite SIAM members often lobbying against each other especially around the CAFE-III norms that will be implemented from April, 2027, the industry was looking forward to continued growth.