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India's automobile market is witnessing a broad-based demand upcycle across passenger vehicles, two-wheelers and commercial vehicles, with festive demand adding further momentum, according to an Emkay Research report.
The report said demand growth across three major vehicle segments has continued simultaneously for several months, a breadth the dealer has not witnessed in more than a decade. Emkay said the expert call was "reinforcing a broad-based demand upcycle across segments," with the current cycle appearing structural rather than being driven only by the festive season. Commercial vehicles remain the strongest segment, supported by a healthy freight and business environment. The report said, "CVs remain the strongest segment," adding that vehicle makers have been able to implement consecutive price increases without materially affecting demand. Emkay noted that Tata Motors Commercial Vehicles has announced a 1 per cent price increase effective October 2026, after hikes of 2.5 per cent in July and 1.5 per cent in April. Ashok Leyland has also taken cumulative price increases of 2.25 per cent in medium and heavy commercial vehicles and 3.5 per cent in light commercial vehicles so far in FY27. Festive demand has also strengthened. While Ganpati is not historically among Maharashtra's biggest vehicle-buying periods, the report said, "bookings are still up >50% this year, largely due to a low base in Sep-25." With Navratri and Dussehra falling in October and Diwali in November, Emkay expects the staggered festive calendar to support demand across segments despite a high base. Passenger vehicle demand also remains healthy, with lower prices supporting renewed interest in small and entry-level cars. Maruti Suzuki's order book is growing 25-30 per cent, according to the report. "MSIL's 25-30% order-book growth supports confidence in +10% 2H growth despite a high base," Emkay said. The report also noted strong traction for refreshed models such as the Brezza, while overall waiting periods at Maruti remain around two to three weeks. Two-wheeler demand is also broad-based and increasingly led by rural markets. TVS continues to see waiting periods despite record volumes, while electric two-wheeler penetration has risen to more than 10.5 per cent in recent months from about 6.6 per cent in FY26. "2W demand is broad-based and increasingly rural-led, with retail pull evident despite supply constraints," the report said. Emkay added that inventory levels remain comfortable despite stronger retail demand, with stocks at about 30-35 days for commercial vehicles and 30-40 days for passenger vehicles, supporting its view that the current demand momentum can sustain into FY27. (ANI)
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