India's Auto Industry: A Mixed Bag of Forecasts and Fortunes

According to a Nomura report, India's passenger vehicle industry is anticipated to grow steadily over the next three years, despite affordability challenges in the mass segment. Premium segments and two-wheelers show promising growth, while commercial vehicles remain tied to economic factors.

India's passenger vehicle (PV) sector is projected to experience steady growth over the next three years, as detailed in a recent report by Nomura. The report outlines a growth trajectory of 1.5% in FY25, escalating to 5% in FY26 and 6% in FY27, though affordability concerns in the mass segment persist.

The report further notes a stagnation in the commercial vehicle (CV) sector in FY25, followed by growth trends of 5% annually in FY26 and FY27. Affordability, exacerbated by currency depreciation and limited impact from government tax cuts, is highlighted as a core challenge for the PV sector, particularly in the mass-market segment.

Demand for premium cars and SUVs, however, is expected to remain robust, according to industry experts who predict continued performance in these segments. Meanwhile, the two-wheeler (2W) and three-wheeler (3W) markets are forecasted to grow significantly, projecting 10% growth in FY25. These insights suggest moderate overall growth for India's auto industry, with distinct performance disparities between vehicle categories.