Auto Shock! Domestic Sales Slide in Q1 FY26—But Guess Where They’re Booming

India’s auto industry had a mixed start to FY 2025–26. Domestic sales dropped in most segments, but exports rose sharply, giving some hope in an otherwise muted quarter, according to the Society of Indian Automobile Manufacturers (SIAM). 

Also Read: Auto Puzzle: Why Car Sales Are Holding Strong Even as Factory Dispatches Drop | Republic World

Domestic sales slip Across Segments

According to the data shared by SIAM, sales of passenger vehicles (PVs) dropped by 1.4%, slipping to 10,11,882 units in the April–June quarter of FY26, down from 10,26,006 units in the same period last year. The two-wheeler segment also lost momentum, falling 6.2% to 46,74,562 units, while commercial vehicle (CV) sales dipped 0.6% to 2,23,215 units.

However, the three-wheeler segment held steady, clocking 1,65,081 units—almost unchanged from 1,65,211 units a year ago.

“Passenger vehicle sales in Q1 of 2025-26 de-grew by (-) 1.4%, posting sales of 1.01 million units as compared to Q1 of the previous year. Sales of three-wheelers in the first quarter grew marginally by 0.1% compared to last year, with 1.65 lakh units, which is the highest ever in Q1,” Rajesh Menon, Director General, SIAM.

Despite the dip, it’s only the second time in two years that PV sales have crossed the one-million mark in the April–June quarter. SIAM attributed the lower overall volume to slower momentum in the latter half of Q1.
“The performance of the auto industry was relatively flat, though the retail registrations for passenger vehicles, two- and three-wheelers were marginally higher than the previous quarter,”— Shailesh Chandra, President, SIAM. Chandra added that consumer sentiment remains subdued, while supply-side pressures continue to weigh on the industry.

Exports give a breather

In contrast to the domestic lull, exports recorded strong double-digit growth across the board. Passenger vehicle exports rose 13.2% year-on-year to 2.04 lakh units—a new record for Q1.
SIAM said the surge was powered by resilient demand from the Middle East, Latin America, and a recovery in Sri Lanka, Nepal, and Japan. Higher shipments under Free Trade Agreements (FTAs), particularly with Australia, also supported the uptick.

Exports of two-wheelers jumped 23.2% to 1.14 million units, while three-wheeler exports surged 34.4% to 0.96 lakh units. Commercial vehicle exports also grew 23.4% to nearly 0.2 lakh units.