New Delhi, August 4: India’s automobile sector showed robust performance in July, driven by strong domestic demand. During this period, wholesale sales of passenger vehicles increased by 34% year-on-year, while retail sales rose by 24%. This information was revealed in a recent report.
According to an analysis released by HSBC India, the demand for passenger vehicles, two-wheelers, and tractors remained strong even amid rising commodity prices due to global instability. The report highlighted that the significant sales of utility vehicles contributed to the demand for passenger cars, benefiting manufacturers due to sustained customer interest and improved supply chains.
In the two-wheeler segment, wholesale volumes saw an increase of approximately 15% year-on-year, while total retail sales surged by 34%. Similarly, the demand for commercial vehicles (CVs) was supported by replacement purchases made by original equipment manufacturers (OEMs) ahead of announced price hikes.
Major companies reported nearly a 28% year-on-year increase in total CV sales. However, the report cautioned that high commodity prices could pressure profit margins. In the first quarter of FY27, the commodity cost index for two-wheelers and passenger vehicles rose by about 10-12%, while the index for commercial vehicles and electric two-wheelers saw an increase of around 13%.
The report also indicated that after several vehicle manufacturers recorded lower profits in the June quarter, some pressure on margins is expected to persist in the September quarter. Meanwhile, the trend of adopting electric vehicles remained strong, with electric two-wheelers accounting for 11.2% of total two-wheeler sales in July, while the penetration of electric four-wheelers was recorded at 8% due to high fuel prices.
Furthermore, the report noted that while recent weeks have seen improvements in rainfall, reservoir levels remain below long-term averages. Additionally, the potential occurrence of El Niño in 2026 may create uncertainty for rural demand and tractor sales in the coming months.
My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.