India’s domestic passenger car industry will see a muted fiscal 2025-26 with sales growth in low single digit in range of 1-4 percent, according to a report released by rating agency, ICRA on Monday, September 1.
The report said that wholesale volumes decreased between April and July by 1.1 percent, showcasing an underperformance at the start of this year.
However, demand is expected to increase in the coming quarters owing to steady new model releases by auto companies and the potential lowering of the GST burden within the new GST reforms, the report said.
The Indian government plans to implement a new GST regime reducing slabs from 5 percent, 12 percent, 18 percent and 28 percent to just 5 percent and 18 percent. This streamlined structure is expected to lower costs for auto makers, potentially supporting long-term industry growth.
On the export front, India’s passenger vehicle shipments rose 9 per cent year-on-year in July 2025. Maruti Suzuki led the growth, followed closely by Hyundai Motor India, reflecting strong international demand. This export momentum highlights the resilience of Indian automakers and contributes positively to overall industry performance despite domestic market fluctuations, the report said.
