New Delhi

India’s automobile industry posted an encouraging start to FY27, with wholesale dispatches registering healthy year-on-year growth across major vehicle categories in April, according to a report by Nomura Holdings.

The report said passenger vehicle (PV) wholesale volumes climbed 26 per cent compared to the same period last year, touching nearly 4.45 lakh units. Two-wheeler sales also recorded impressive growth of 33 per cent, while medium and heavy commercial vehicle (MHCV) dispatches rose 14 per cent.

Tractor sales emerged as a major positive surprise, registering a 22 per cent annual increase, significantly outperforming Nomura’s earlier estimate of a two per cent decline.

Retail sales also remained on a firm footing during April. Passenger vehicle registrations stood at approximately 4.05 lakh units, reflecting a 16 per cent increase over the previous year. Dealer feedback indicated that consumer demand remained resilient despite price revisions and global economic uncertainties, though there were signs of softer fresh bookings and moderate channel stocking during the month.

Electric mobility continued to gain momentum. EV penetration in the passenger vehicle category rose to nearly 5.5 per cent in April, compared with four per cent in FY26. In the two-wheeler market, EV penetration increased to 7.8 per cent from around 6.5 per cent in the previous financial year.

The report noted that stronger consumer sentiment, possible fuel price increases after elections, and continued policy support could further accelerate EV adoption in the coming months.

At the same time, rising input costs remain a concern for manufacturers. Commodity inflation has created margin pressure of more than 380 basis points in the passenger vehicle segment and over 560 basis points in two-wheelers between September 2025 and April 2026. According to the report, automakers may be compelled to raise prices further to protect profitability, which could impact demand, especially in entry-level categories.

Among individual manufacturers, Maruti Suzuki and Mahindra & Mahindra, particularly its tractor business, performed better than market expectations. However, Mahindra’s utility vehicle segment, Tata Motors passenger vehicles, TVS Motor Company, and Hero MotoCorp reported volumes below projections, partly due to production-related constraints.

Waiting periods for most vehicle models have largely normalised, except for a few recently launched products. Vehicle registration data from the Vahan portal showed passenger vehicle sales increasing 16 per cent, MHCV sales rising 12 per cent, and two-wheeler registrations growing 13.5 per cent in April.

In the electric two-wheeler segment, retail sales surged 62.1 per cent year-on-year to nearly 1.48 lakh units. TVS Motor led the category with a 25.3 per cent market share, followed by Bajaj Auto and Ather Energy. Hero MotoCorp and Ola Electric occupied the fourth and fifth positions, respectively.

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Nomura expects India’s passenger vehicle industry to maintain steady growth of around eight per cent annually through FY26 and FY27, with electric vehicles approaching a major growth inflection as adoption expands across segments.