Auto sales momentum continues in March, but growth signals moderation: Report

New Delhi: India's automobile sector continues to exhibit broad-based strength in March 2026, although early signs of moderation are beginning to emerge amid external uncertainties, according to a recent report by YES Securities.

The report noted that "auto demand in Mar'26 remained broadly strong across segments, supported by festive tailwinds, favourable base, and policy support," even as "early signs of moderation are emerging."

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Across segments, demand trends remained resilient. Two-wheelers saw strong retail momentum with "18-20% YoY growth, driven by a favourable base and robust rural demand," while passenger vehicles (PVs) benefited from "festive tailwinds, new launches, and policy benefits."

Commercial vehicles (CVs) also recorded healthy traction, with "MHCV retail growth of 16-18% YoY driven by a favourable base and strong retail/small fleet demand," the report said.

However, the outlook is turning cautiously optimistic rather than unequivocally bullish. The report highlighted that "a slight moderation in recent inquiries indicates growing consumer caution amid external factors like untimely rains and geopolitical concerns."

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Industry feedback echoes this sentiment. According to the dealer body FADA, "there is no slowdown on the ground as of now... Demand across passenger vehicles and two-wheelers remains healthy, even as some caution has begun to creep into buyer behaviour."

Looking ahead, the near-term outlook hinges on multiple evolving factors. While pre-buying ahead of expected price hikes and stable fleet utilisation are supporting demand, risks remain from macro uncertainties. The report cautioned that inquiry levels, especially from large fleet operators, have moderated due to "geopolitical uncertainties and cash conservation," though this is seen as temporary.

Overall, the sector appears to be transitioning from a phase of strong recovery to a more measured growth trajectory. As the report summed up, while demand remains robust across segments, caution has begun to creep into buyer behaviour, indicating a more nuanced outlook for the coming quarters.