New Delhi [India], May 5 : India's automobile industry recorded a strong start to FY27, with April wholesale volumes rising across segments even as inflationary pressures and commodity costs continued to build, according to a report by Nomura.
Passenger vehicle (PV) wholesales grew 26 per cent year-on-year to around 445,000 units. while two-wheelers and medium and heavy commercial vehicles (MHCVs) also saw robust growth of 33 per cent and 14 per cent respectively. Tractor volumes outperformed expectations significantly, rising 22 per cent year-on-year against Nomura's estimate of a 2 per cent decline.
Retail momentum remained healthy, with PV retail sales at around 405,000 units, up 16 per cent year-on-year. Dealer checks indicated sustained demand despite price hikes and global uncertainties, although some moderation in new bookings and channel filling was observed during the month.
Electric vehicle (EV) adoption continued to accelerate, with EV penetration in PVs rising to about 5.5 per cent in April from 4 per cent in FY26. In the two-wheeler segment, EV penetration increased to 7.8 per cent from around 6.5 per cent in the previous fiscal. The report noted that improving demand sentiment, potential fuel price hikes post-elections, and supportive government policies could further boost EV adoption.
However, rising commodity costs remain a concern. The report highlighted margin pressures of over 380 basis points for PVs and more than 560 basis points for two-wheelers between September 2025 and April 2026. The report said automakers may need to implement price hikes to safeguard margins, which could weigh on demand, particularly in entry-level segments.
The report noted that, among automakers, Maruti Suzuki and Mahindra & Mahindra's tractor business exceeded expectations, while Mahindra's utility vehicles, Tata Motors Passenger Vehicles, TVS Motor, and Hero MotoCorp reported volumes below estimates, partly due to production challenges.
Waiting periods have largely normalised across models, except for select new launches. Meanwhile, Vahan registration data showed PV volumes rising 16 per cent year-on-year, MHCVs up 12 per cent, and two-wheelers increasing 13.5 per cent in April.
In the electric two-wheeler segment, retail sales surged 62.1 per cent year-on-year to around 148,000 units. TVS Motor led the segment with a market share of 25.3 per cent, followed by Bajaj Auto and Ather Energy. Hero MotoCorp and Ola Electric were ranked fourth and fifth respectively.
Nomura said it expects PV industry growth to remain steady at around 8 per cent annually over FY26 and FY27, with EVs approaching an inflection point as adoption gains pace across segments.
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