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Informist, Tuesday, Jun. 30, 2026

 

MUMBAI – Demand for vehicles in India remained resilient in June, with passenger vehicles and two-wheeler segments seen posting double-digit growth in wholesale sales. Analysts are concerned that demand for commercial vehicles may moderate due to the onset of monsoon affecting freight activity, cautious sentiment amid the West Asia war, and higher fuel prices, among other factors. While the sales momentum for tractors held up in June, the monsoon pattern in the coming months and reservoir levels are a concern, brokerages said in their pre-monthly sales report. 

 

Interactions with dealers showed that demand for passenger vehicles continued to be strong on account of a steady pipeline of new launches, the market's strong appetite for utility vehicles, and an increase in first-time buyers and replacement demand in June, brokerages said. Discounts given by dealers were broadly stable in June, although select automobile makers took price hikes to offset input costs, brokerages said.

 

As for electric vehicles, demand remains strong with 15–20% enquiry growth and rising wait periods of three-four months, Yes Securities said in a report on Friday. Inventory of passenger vehicles remains at four-five weeks, supporting steady dispatches, with no major supply constraints seen across companies, the report said. However, some bottlenecks persist in models of sport utility vehicles which are on high-demand and electric vehicles, amid stronger-than-expected alternate powertrain uptick, Yes Securities said. 

 

Nirmal Bang Institutional Equities expects overall passenger vehicle wholesale volumes to grow 14% on year in June and SMIFS Ltd. sees it rising 15%. Maruti Suzuki India Ltd., Mahindra & Mahindra Ltd., and Tata Motors Passenger Vehicles Ltd. are seen posting on-year growth of 14-60% in wholesale sales in June, according to four brokerage reports. Meanwhile, sales of Hyundai Motors India are seen moderating substantially in June due to production disruption because of a fire at Hyundai Mobis, as per SMIFS report. The broking firm expects the firm to see a 2% on-year fall in domestic volumes. Higher exposure of Hyundai Motors to West Asia in terms of exports, is also seen as a drag on volumes. 

 

As for the two-wheeler industry, brokerages expect double-digit growth in wholesale volumes due to new product launches, wedding season demand, and healthy underlying retail trends. Retail sales were led by sustained demand for scooters, premium motorcycles, and continued momentum in electric two-wheelers, according to brokerage reports. Nirmal Bang expects the overall two-wheeler volume to grow 11% on year in June. It said while retail sales were healthy, wholesale dispatches could see some moderation due to supply constraints in select electric vehicle models and inventory calibration by companies following a strong May. While Bajaj Auto Ltd., Royal Enfield, and TVS Motor Co. are seen posting healthy growth in volumes, Hero MotoCorp may falter due to a high base, according to brokerages.

 

Commercial vehicle wholesale volumes in the domestic market are projected to grow around 13% on year, supported by improving freight demand, goods and services tax-led affordability in the light commercial vehicle segment, and a pickup in infrastructure and construction activity, SMIFS said. Medium and heavy commercial vehicle volumes likely moderated in June, brokerages said, mainly due to cost-consciousness among fleet operators. 

 

Demand for heavy commercial vehicles in June saw no meaningful spike but there was no incremental deterioration either, with fleet sentiment stabilising after earlier weakness, Yes Securities said. Enquiry from large fleet operators remains subdued due to weak freight conditions and working capital stress, though the pace of decline has clearly bottomed out from earlier instances, the broking firm said. Tata Motors Ltd. is expected to post 12-15% on-year growth in wholesale volumes, as per three brokerages' estimates. Meanwhile, Ashok Leyland Ltd. is predicted to post subdued volumes in June.

 

While wholesale volumes in June were robust for the tractor industry, the outlook for the financial year looks weak due to lingering risks of El Nino and reduced farm subsidies in states like Maharashtra. A higher base for tractor volumes is also seen as a dampener for the industry, as per brokerages. Accordingly, the progress of monsoon rainfall and reservoir levels will remain key factors to monitor for the sector. Motilal Oswal projects M&M's tractor volumes to rise 18% on year and those of Escorts Kubota to increase around 17% on year.  End

 

Reported by Gopika Balasubramanium

Edited by Avishek Dutta

 

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