India’s passenger vehicle production industry is expected to log cumulative domestic and export volumes of 5 million units in the fiscal year 2025-26, an all-time high, despite a slow annual growth rate of 2-3 percent over the previous fiscal year, according to an industry forecast by Indian rating agency Crisil on Wednesday, April 30.
“India’s passenger vehicle (PV) industry is set to scale a fresh high this fiscal with domestic and export volumes cumulatively crossing 5 million units even as the annual growth rate slows to 2-4 percent. This will mark the fourth consecutive year of record sales although the momentum has eased significantly from the 25 percent surge seen in 2023 in the immediate after-effect of the pandemic,” Crisil said.
The domestic market accounted for 85 percent of the total volume in the last fiscal year, with exports accounting for the rest, and this proportion is expected to be sustained in the current fiscal year, it said.
The entry of global premium EV models, including Tesla, would intensify competition in the premium segment, which accounts for less than 10 percent of the overall volume, and will likely reset consumer expectations across categories, pushing Indian original equipment manufacturers (OEMs) to accelerate technology upgrades, Crisil said.
Looking ahead, the pace of interest rate cuts and EV adoption, as well as potential supply shocks, could impact the availability of chips and battery cells amid global tensions, and will, therefore, need to be watched, it added.
