Auto Wholesale Report July 2026: Key Highlights and Future Outlook

Update of the Auto Wholesale sector for the month of March

Growth Momentum Strengthens; EV Adoption Accelerates Along with Festive Inventory Build-up

July 2026 marked another exceptionally strong month for the Indian automobile industry, with overall wholesale volumes across key OEMs increasing 31.5% YoY and 4.3% MoM, supported by production normalisation, healthy underlying demand, continued export strength and inventory build-up ahead of the festive season. Passenger vehicle dispatches reached record levels, aided by Hyundai’s production recovery following the June disruption and Maruti Suzuki’s production ramp-up after scheduled maintenance, while SUVs continued to remain the primary growth driver. The two-wheeler segment maintained robust momentum across both domestic and export markets, supported by improving rural demand, premiumisation and sustained strength in electric vehicles. Commercial vehicles registered another healthy month on the back of infrastructure activity, replacement demand and stable freight conditions, whereas tractor volumes remained resilient, reflecting favourable monsoon progress and healthy agricultural sentiment.

Looking ahead, the industry outlook remains constructive, supported by healthy retail demand, improving rural sentiment, easing supply constraints and the upcoming festive season. While dealer inventories have increased following record dispatches in July, the inventory build-up appears largely intentional ahead of festive demand. Commodity costs have broadly stabilised but remain elevated, leaving limited room for margin expansion and increasing the likelihood of calibrated price hikes over the coming months. August dispatches are also expected to benefit from a favourable base, as vehicle purchases were deferred in August 2025 ahead of the anticipated GST revision, which is likely to support healthy year-on-year growth. Demand resilience, export recovery and accelerating EV adoption are expected to remain key growth drivers, while inventory levels, discounting trends and raw material costs remain important monitorables.

Passenger Vehicles

The PV segment delivered another outstanding performance during July 2026, with aggregate wholesales across key OEMs rising 40.4% YoY and 18.2% MoM, reflecting production normalisation, healthy SUV demand and inventory replenishment ahead of the festive season. Maruti Suzuki reported 42.4% YoY growth in domestic PV sales, driven by broad-based growth across its Mini, Compact and Utility Vehicle portfolio, while Hyundai recorded its highest-ever monthly sales after production recovered from the temporary disruption witnessed during June. Tata Motors remained the fastest-growing OEM, with domestic PV volumes increasing 58.4% YoY, supported by sustained demand across its SUV portfolio and continued momentum in electric vehicles. Mahindra & Mahindra maintained healthy growth, reporting 20.4% YoY growth in domestic SUV sales, supported by healthy traction in its EV portfolio and continuing strength in models like XUV 700 and Thar. Industry retail demand remained healthy despite seasonal moderation from the monsoon, while wholesale dispatches outpaced registrations as OEMs increased dealer inventory ahead of the festive season. Alternative fuel vehicles continued to gain traction, with EV penetration approaching 8% and CNG continuing to increase its share within the PV market.

Two Wheelers

The 2W segment sustained its healthy growth trajectory in July 2026, with aggregate domestic wholesales rising 29.1% YoY and 3.0% MoM, supported by improving rural demand, healthy premium motorcycle sales, continued scooter momentum and a gradual recovery in export markets. Demand remained broad-based across commuter and premium segments, while healthy retail of electric scooters continued to support overall industry growth. TVS Motor remained the standout performer, reporting 42% YoY growth in domestic two-wheeler sales, driven by broad-based strength across motorcycles and scooters, while electric two-wheeler sales more than doubled YoY to over 60,000 units. The company also recorded its highest-ever monthly international business and three-wheeler sales, reflecting sustained export recovery across key overseas markets. Hero MotoCorp reported 21.6% YoY growth in domestic dispatches, supported by healthy retail demand across its core commuter portfolio, led by Splendor and the new Passion, alongside continued traction in the Glamour X and Super Splendor XTEC 2.0. Scooter demand also remained robust, driven by the Destini and Xoom range, while VIDA continued to witness healthy EV momentum with product expansion and entry into new international markets. However, exports remained under pressure despite the company’s continued global expansion initiatives. Eicher Motors continued to witness strong momentum, with Royal Enfield volumes growing 34.3% YoY, supported by sustained demand across its core 350cc portfolio, recent product refreshes and encouraging initial response to its first electric motorcycle, the Flying Flea C6. The company also announced Phase-I of its new Andhra Pradesh manufacturing facility, which is expected to support long-term capacity expansion and future growth.

Commercial Vehicles

The CV segment maintained its strong growth momentum in July 2026, with domestic wholesales across key OEMs rising 29.9% YoY, supported by continued government-led infrastructure spending, improving freight demand, replacement purchases by fleet operators and pre-buying ahead of announced price hikes by several OEMs. Improving financing availability and relatively stable freight rates further supported fleet additions, although raw material cost inflation remains a key monitorable for manufacturers. Tata Motors reported 28.2% YoY growth in domestic CV sales, driven by broad-based growth across HCVs, ILMCVs, SCVs and passenger carriers, while exports more than doubled YoY. Mahindra & Mahindra delivered 32.5% YoY growth, supported by robust demand across its LCV portfolio. Ashok Leyland continued to witness broad-based strength, with domestic volumes growing 26.3% YoY, driven by robust demand across the M&HCV segment, while VECV also reported healthy growth, supported by improving demand for medium and heavy-duty trucks and continued strength in its light-duty portfolio.

Tractors

The tractor segment remained resilient in July 2026, with aggregate domestic wholesales across key listed OEMs increasing 21.5% YoY, supported by improved monsoon progress, pickup in Kharif sowing activity and healthy rural sentiment. Mahindra & Mahindra reported 20.9% YoY growth in domestic tractor sales, reflecting sustained demand across key agricultural markets. Escorts Kubota outperformed the industry, registering 23.7% YoY growth in domestic volumes, driven by steady wholesale and retail demand, while improved rainfall during July reduced the cumulative rainfall deficit and further supported rural demand. Although MoM volumes moderated following a strong June, overall rural fundamentals remain resilient. However, monsoon progression, Kharif crop development, input cost pressures and the delayed festive season remain key monitorables over the coming months.