India Auto Sales Surge 18% in Q3 FY26, Driven by PV and Two-Wheeler Boom
Overview
India's automobile industry posted a robust 17.6% year-on-year growth in domestic sales during Q3 FY26, reaching 7.48 million units. Passenger vehicles, utility vehicles, commercial vehicles, and two-wheelers all contributed to this broad-based expansion. SIAM cited supportive policies, easing finance, and strong festive demand for the sector's landmark performance.
Auto Sector Posts Landmark 17.6% Growth in Q3 FY26
India's automobile industry experienced a significant expansion in the October-December 2025 quarter, with total domestic vehicle sales soaring 17.6% year-on-year to 7.48 million units. This marked a strong rebound from 6.36 million units sold in the same period last year. Total vehicle production also climbed 16.4% to 8.84 million units, while exports surged 24.7% to 1.75 million units, underscoring India's growing global manufacturing footprint.
The Society of Indian Automobile Manufacturers (SIAM) attributed the robust performance to a confluence of factors. These included government policy support, more accessible financing options, and a boost in consumer confidence during the crucial festive season. This growth became broad-based across segments, a trend SIAM President Shailesh Chandra described as a "landmark year" for the Indian auto industry.
Passenger Vehicles Lead Charge
Passenger vehicles (PVs) were a primary engine of growth. Domestic PV sales surged 20.6% to a record 1.28 million units in Q3 FY26, achieving the segment's highest-ever quarterly sales. Utility vehicles (UVs) continued their dominance, with domestic sales rising 20.9% to 8.52 lakh units, reflecting sustained consumer preference for SUVs. This enhanced affordability was partly due to GST rate reductions and income tax relief.
December 2025 volumes further illustrated this momentum. Passenger vehicle sales climbed 26.8% year-on-year to 3.99 lakh units. For the calendar year 2025, PV sales hit an all-time high of 44.9 lakh units, a 5% increase over the previous year.
Commercial Vehicles and Exports Rebound
Commercial vehicles (CVs) also demonstrated a strong recovery. Domestic CV sales in Q3 FY26 jumped 21.5% to 2.90 lakh units, the highest quarterly volume on record. This surge was supported by increased freight movement and infrastructure development demand. Exports across all vehicle categories rose 13.6% during the quarter, indicating steady demand from international markets, particularly neighboring countries and the Middle East.
Two-Wheelers Hit New Milestones
Two-wheelers, the backbone of the Indian automotive market, also achieved significant milestones. Domestic sales in Q3 FY26 rose 16.9% to a record 5.70 million units. December 2025 sales showed particular strength, jumping 39.4% to 1.54 million units, with scooters outperforming motorcycles as a key driver. Urban demand and evolving mobility preferences were cited as primary influences, with strong demand from Sri Lanka and African markets boosting three-wheeler exports.
