India

SIAM highlights Auto Industry Q1 performance as “Relatively Flat”

Posted on by Minakshi

Indian Auto Industry Q1 Performance: A Cautious Optimism

Mumbai: India’s automotive sector witnessed a “relatively flat” performance in the first quarter (Q1) of fiscal year 2025-26, according to the Society of Indian Automobile Manufacturers (SIAM). While retail registrations for passenger vehicles, two-wheelers, and three-wheelers showed a marginal increase compared to the previous Q1, overall market sentiment remains subdued.

Key Challenges and Opportunities

Despite the slight uptick in registrations, the industry continues to grapple with ongoing supply-side challenges. This has contributed to the cautious outlook. However, there’s optimism on the horizon.

  • Supply Chain Disruptions: Persistent global supply chain issues continue to impact production and delivery schedules.
  • Consumer Sentiment: Overall sentiment across vehicle categories has been lukewarm.
  • Used Car Market: The used car segment is experiencing faster growth than the new car market.

Hope on the Horizon: Festive Season and Rate Cuts

The industry anticipates a boost in sales driven by the upcoming festive season, a period traditionally associated with increased consumer spending. Furthermore, the recent repo rate cuts by the Reserve Bank of India (RBI) are expected to improve consumer sentiment and encourage borrowing, thereby stimulating demand for automobiles.

Expert Insights

Industry experts believe that a combination of factors, including improved economic conditions and innovative product offerings, will be crucial in driving sustainable growth in the automotive sector. The focus remains on adapting to evolving consumer preferences and navigating the dynamic market landscape.

Summary:

  • India’s auto industry saw a relatively flat Q1 performance despite slight registration increases.
  • Supply chain issues and subdued consumer sentiment are key challenges.
  • The upcoming festive season and RBI rate cuts offer hope for improved performance.
Key Takeaways:

  • The Indian automotive market is experiencing a period of consolidation after previous periods of rapid growth.
  • Supply chain resilience is critical for manufacturers to meet demand and maintain market share.
  • Financial incentives and festive season buying can significantly impact sales volumes in the short term.
  • The growth of the used car market presents both challenges and opportunities for new car manufacturers.