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To close FY26 with eight per cent growth and record sales of around 4.73 million units, the sector will need a particularly strong January–March 2026 performance
The passenger vehicle industry is staring at a decisive final quarter as automobile manufacturers endeavour to meet an ambitious full-year target. To close FY26 with around eight per cent growth and record sales of roughly 4.73 million units, the sector will need a particularly strong January–March 2026 performance – a period that historically contributes a large share of annual volumes.
The urgency is driven by recent signs of demand moderation. After buoyant festive season momentum, retail sales growth eased noticeably in December expanding by only about three per cent. The slowdown stands in contrast to the double-digit growth recorded in October and November period. Financial conditions are also influencing buying behaviour.
Household net financial savings have declined to approximately five per cent of GDP raising concerns over consumers’ ability to fund discretionary purchases such as passenger vehicles. While policy rate cuts have provided some relief, banks remain selective with auto loans, prompting carmakers to move with finance schemes, subvention offers and non-bank credit channels.
The industry had earlier received a temporary boost following the introduction of GST 2.0 in September 2025 which improved affordability and triggered new purchases across multiple segments. However, the spike is now showing signs of tapering. As a result, the new quarter will determine whether GST-derived gains translate into sustained demand or merely represent a short term pull of sales.
Manufacturers and dealers are responding with calibrated pricing and inventory strategies. Maruti Suzuki and Hyundai have already announced price hikes effective January ranging between 0.6 per cent and 2 per cent. At the retail level, inventory levels are being consciously maintained at around 30 to 35 days with dealers preparing for a faster clearance cycle in Q4.
Maruti Suzuki continues to hold a commanding lead in the passenger vehicle segment. Hyundai remains the second largest PV maker by dispatches in the first half of FY26 shipping over 373,000 units. However, in the domestic market during calendar year 2025, both Mahindra & Mahindra and Tata Motors have outperformed Hyundai due to having strong SUV portfolios and increasing electric vehicle penetration.
Urban markets are showing signs of saturation and aspiration fatigue particularly in higher priced categories. In contrast, rural and semi-urban regions are emerging as key growth drivers aided by a stable monsoon, healthy crop output and rising replacement demand for compact cars and entry-level SUVs.
The post India’s Car Industry Eyes High Q4 Sales To Achieve 8% Growth In FY2026 appeared first on Gaadiwaadi.com - Latest Car & Bike News by Surendhar M.
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