New Delhi

India's automobile sector is likely to sustain its growth momentum in October 2026, driven by strong urban demand and adequate financing availability, with commercial vehicles expected to record double-digit growth and passenger vehicles and two-wheelers projected to post single-digit increases, according to a report by Nuvama Institutional Equities.

“The growth momentum is likely to be underpinned by strong urban demand and adequate financing availability,” the report said, highlighting supportive demand conditions across key automobile segments.

Nuvama expects wholesale volumes to continue growing during the month, with commercial vehicles (CVs) likely to outperform other segments. Passenger vehicles (PVs) and two-wheelers (2Ws) are projected to register moderate growth, while exports are expected to remain positive for most original equipment manufacturers (OEMs).

“We reckon wholesales growth shall continue in Oct-26 with CV volumes likely to grow in double digits YoY and PV/2W volumes to grow in single digit,” the report noted.

In the commercial vehicle segment, domestic sales are projected to increase by around 20 per cent year-on-year (YoY), supported by positive trends in e-way bills and freight rates. Total volumes for major players are estimated to rise by up to 28 per cent YoY, according to the report.

Passenger vehicle volumes in the domestic market are expected to grow by around 8 per cent YoY, supported by improved affordability, new product launches and adequate financing availability. Nuvama also noted that discounts offered by most OEMs have increased compared with the previous month amid the festive season.

The two-wheeler segment is projected to record growth of around 7 per cent YoY, with strong urban demand and financing availability expected to support sales.

On the export front, mass-market OEMs are likely to maintain positive growth, driven by rising demand across Africa, Latin America and Asia, the report said.

However, the tractor industry is expected to remain an area of weakness, with volumes projected to decline by around 4 per cent YoY. The anticipated contraction is primarily attributed to a high base in the previous year, particularly in western and southern regions, where state-level subsidies and an earlier festive season had supported sales.

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Additionally, rising fuel prices are likely to keep farmers' input costs elevated, potentially putting further pressure on tractor demand, Nuvama noted.