Latest Car News in India

India’s automobile market continues to show strong growth despite rising vehicle prices and higher petrol costs. The combination of GST cuts, income-tax relief, lower interest rates and growing demand for electric vehicles has helped sustain consumer interest in automobiles. The GST reduction introduced in 2025 has played a major role in supporting vehicle demand. Several manufacturers, including Maruti Suzuki, reduced vehicle prices by around 11-12% in September last year, exceeding the 7-8% benefit provided by the GST reduction in some segments. Although vehicle prices have increased since then because of higher input costs, dealerships continue to report healthy bookings. 

 

 

Passenger vehicle sales grew 16.8% year-on-year during the January-March quarter. Dealer inventory also declined significantly, falling to around 28 days by the end of March compared with 52-53 days a year earlier. The momentum continued in the April-June quarter, when passenger vehicle sales increased by nearly 23%.

Government policy measures have also strengthened consumers’ purchasing power. Income-tax changes have increased disposable income for many salaried individuals, while lower interest rates have made vehicle financing more affordable. The policy rate declined by 125 basis points from 6.5% in December 2024 to 5.25% in December 2025. This reduction helped bring down borrowing costs, supporting demand for vehicle loans. Vehicle loan growth remained between 12.5% and 18.6% year-on-year from October 2025 through June 2026, with growth exceeding 17% in every month since January. Higher employment in sectors such as global capability centres (GCCs) and start-ups has also contributed to consumer demand.

Petrol prices have increased by around Rs 7.50 per litre, creating additional pressure on running costs for conventional vehicles. However, the higher fuel cost appears to be encouraging more buyers to consider electric cars. Electric passenger vehicle registrations increased 81.6% year-on-year to 151,050 units during January-June 2026. Monthly EV sales crossed the 30,000-unit mark for the first time in June, reaching 33,524 units. Sales remained at a similar level in July. According to FADA data, EV penetration reached double digits for the first time in June, touching 10.6%.

The two-wheeler segment has also remained resilient despite higher fuel prices and inflation. Sales increased 14% year-on-year during the April-June quarter. While this was slower than the 25% growth recorded during January-March, the segment continued to perform strongly. Concerns over a potentially weak monsoon are also unlikely to significantly derail automobile demand. Economists expect agricultural economic activity to remain positive, with stronger livestock and fisheries output potentially offsetting weaker crop production.

 

Overall, industry experts expect India's automobile market to maintain its growth trajectory. Rural sentiment has remained relatively stable despite the slower monsoon, while favourable tax policies, affordable financing and increasing EV adoption continue to support vehicle demand.