Domestic car sales surge in June on tax cuts, lower interest rates & strong demand

Domestic car sales grew in double digits from a year earlier in June, helped by a low base and sustained consumer demand, supported by improved affordability post tax cuts, lower interest rates, and income tax rebates.

Around 400,000 cars, sedans, and utility vehicles were dispatched from factories to dealers last month, a 24% rise from 321,500 units sold in June 2025. It marked the third straight month of double-digit sales growth after increases of 27% and 25% in May and April, respectively. The sales data includes electric cars.

Industry growth was buoyed by strong volumes at market leaders Maruti Suzuki, Tata Motors, and Mahindra & Mahindra (M&M), whose sales climbed 24%, 67%, and 28%.

Partho Banerjee, senior executive officer, marketing and sales at Maruti Suzuki said despite a week-long factory maintenance shutdown last month, the company posted the highest-ever wholesales for June in 2026. “We got some additional vehicles due to the capacity expansion in Kharkhoda, and will further ramp up production later this quarter to meet customer demand,” he said, adding, “We are seeing strong traction both for our range of small cars and utility vehicles, even though there are some headwinds on account of the crisis in Iran and lower than expected monsoons so far this year”.

Demand for Maruti’s CNG vehicles was particularly strong in June, comprising as much as 40% of total sales. The company closed the month with pending orders for 130,000 vehicles and network stocks of 75,000 vehicles.

Shailesh Chandra, MD and CEO, Tata Motors Passenger Vehicles, said robust customer demand and success of recent launches boosted wholesales and retails. “We are seeing encouraging growth in EV adoption across segments and the strong momentum in the entry EV category signals rapid mainstreaming of electric mobility across India,” he said.

Hyundai Motor India, however, posted a 10% drop in sales due to production loss of 13,900 units following a fire at one of its vendor’s facilities which temporarily disrupted operations.

Tarun Garg, MD & CEO, said normal operations resumed on June 22. “We expect to recover the loss in June production volume within Q2 of FY26-27,” he said.

At Toyota Kirloskar Motor (TKM), sales rose 8% to 28,441 units.

In the two-wheeler segment too, demand largely remained healthy. Though Hero MotoCorp saw a 4% drop at 502,890 units, the company said momentum in the market is good with retail sales growing by 18% to 466,000 units in June. Sales at Honda Motorcycle & Scooter India climbed 21% to 468,956 units, and Royal Enfield by 34% to 102,930 units last month.

In the commercial vehicle segment, market leader Tata Motors’ sales surged 31% to 36,599 units while Chennai-based Ashok Leyland clocked a 26% rise at 17,912 units.

“We commenced FY27 on a positive note, delivering consistent double-digit growth in each month of Q1, on a year-on-year basis,” said Girish Wagh, MD & CEO, Tata Motors. Sales for the June quarter rose 27% to 108,488 vehicles.

“Looking ahead, while commodity pressures will persist, we expect the momentum to continue, driven by gradual improvement in customer sentiment which had seen softening during the quarter,” said Wagh. “The growth is expected to be driven by auto and port logistics, e-commerce and core sectors, with the monsoon remaining a key monitorable.”

In the farm equipment sector, Mahindra’s sales volume grew 12% to 58,177 tractors in June. Veejay Nakra, president, farm equipment business, said, “While it is early to assess the full impact of emerging El Nino conditions, strong government interventions like sustained fertiliser subsidies and targeted support measures at the local level are expected to mitigate some of the risk to farmers and cushion its impact to the Kharif season.”