India's automotive industry delivered its strongest-ever first quarter performance in April-June, with domestic passenger vehicle dispatches reaching a record 12.73 lakh units, marking a 25.9% year-on-year growth. According to SIAM data, utility vehicles significantly propelled the growth, capturing 68% of total PV sales with 28.6% growth compared to passenger cars which registered 21.3% YoY growth with 367,549 units. Total PV sales in June 2026 stood at 3,88,144 units, a 24.1% increase over June 2025's 3,12,851 units, reflecting strong underlying growth momentum. PV exports touched 2.22 lakh units in Q1 FY27, up 8.8% from the previous year and the highest-ever export volume for the segment, with demand from Latin America being a key driver alongside pickup in orders from Europe and Japan. Two-wheelers posted a growth of 20.3% in Q1 at 56.29 lakh units compared to 46.78 lakh units in the year-ago period, while three-wheelers clocked highest-ever Q1 dispatches at 2.14 lakh units, up 29.7% from 1.65 lakh units. Commercial vehicles also posted their highest-ever sales with 2.65 lakh units, posting 18.3% growth compared to the previous year.
Brokerages expect Q1 FY27 to be a strong revenue quarter but a weaker one for profitability, with automobile OEM revenue rising 22-29% year-on-year and auto ancillary revenue growing 17-21%. However, EBITDA growth is expected to trail revenue growth as higher steel, aluminium, copper, rubber, crude-linked input and freight costs squeeze margins. Nuvama forecasts aggregate EBITDA growth of 10% against revenue growth of 22%, while profit after tax (PAT) growth is expected to be uneven and generally slower than the topline. The margin pressure stems from commodity inflation and supply chain disruptions, with West Asia tensions raising export costs and execution risks rather than materially weakening overall export demand during the quarter.
Tata Motors emerged as the second-largest player in the domestic passenger vehicle market during the quarter, selling nearly 1.9 lakh units compared to close to 1.3 lakh units in the corresponding period last year. This performance enabled the company to overtake Mahindra & Mahindra, which sold over 1.7 lakh units in Q1, up from 1.5 lakh units in the year-ago period. The company's passenger vehicle sales surged 46% year-on-year to 182,574 units, representing the highest growth rate among major carmakers and positioning it as one of the three auto stocks with strongest Q1 FY27 volume growth. Utility vehicle sales jumped to 1.5 lakh units during the quarter, with the Harrier and Safari models witnessing healthy demand, while the Curvv model added momentum in the mid-size category. Utility vehicles (UVs) grew 28.6% year-on-year to 8.62 lakh units and now account for roughly 68% of total PV sales, underscoring the continuing consumer preference for UVs over traditional sedans and hatchbacks.
Exports emerged as a key growth driver during Q1 FY27, with all major vehicle segments recording their highest-ever first-quarter overseas shipments. Passenger vehicle exports rose 8.8%, while two-wheeler exports grew 36.6%, commercial vehicles increased 43.3% and three-wheelers surged 57.7%. SIAM attributed this growth to healthy demand from Latin America, Africa and South Asia, alongside improving demand from Europe and Japan for passenger vehicles and stronger pick-up truck demand from Southeast Asia. The strong export performance demonstrates the industry's expanding global footprint and diversified market reach across multiple regions.
Maruti Suzuki maintained its market leadership with retail registrations up 27.3% year-on-year to 498,632 units, while Hyundai Motor India held its position as the fourth-largest player with nearly 1.4 lakh units. The competitive landscape reflects the strong performance across all major automotive manufacturers in India's expanding passenger vehicle segment. Kia India sold a record 163,749 units in H1, lifting its share of parent Kia's global sales to an all-time high, demonstrating the continued strength across the industry. Total two-wheeler sales rose 18.6% to 18.51 lakh units in June compared to 15.61 lakh units in June last year, while three-wheeler dispatches were up 26.1% at 77,951 units against 61,828 units in the year-ago period. Commercial vehicle sales reached 2.65 lakh units in Q1, posting 18.3% growth compared to the previous year, marking the segment's highest-ever Q1 performance.
According to SIAM President Shailesh Chandra, the strong performance across segments in Q1 FY27, despite headwinds from West Asia disruptions, can be attributed to supportive domestic demand, aided by lower GST rates, softer financing costs, low base effect and introduction of new models. While overall consumer sentiment and demand remain steady, the industry continues to closely monitor geopolitical developments and the progress of the monsoon. Rainfall in late June and the first week of July has reduced the monsoon deficiency to some extent, while inflation has remained reasonable and has not impacted demand in Q1. On the outlook for Q2 FY27, SIAM expects steady demand to continue as the industry enters the festive season, though commodity costs continue to remain a pressure point for the industry. The vehicle cost has remained lower due to GST 2.0 impact, along with availability of financing at lower rates, which are continuing to drive demand across all segments.
