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Domestic Auto Sales Fall 5.1% as Exports Soar to Record Levels

Domestic headwinds have left dealer inventories high, driving automakers to rely on export growth.

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Automobile sales | Image: Reuters
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Overview

  • Overall domestic auto sales in Q1 FY26 fell 5.1% year-on-year to 60.75 lakh units, with passenger vehicle dispatches to dealers in June sliding 7.4% to 3.13 lakh—the lowest in 18 months.
  • Exports jumped 22.2% to 14.57 lakh units in Q1, driven by a 52.8% surge in commercial vehicle shipments and strong orders from the Middle East and Latin America.
  • Utility vehicles led category gains with 3.8% growth and a 66% share of passenger vehicle sales, while passenger cars tumbled 11.2%, two-wheelers declined 6.2% and three-wheelers inched up 0.1%.
  • Manufacturers cite supply-chain strains, notably rare-earth magnet licensing delays from China, as a factor in rising dealer stocks and production constraints.
  • The Society of Indian Automobile Manufacturers remains cautiously optimistic for Q2, forecasting a rebound supported by monsoon-linked rural demand, festival season buying and RBI repo rate cuts.