Auto industry sees flat Q1 performance, cautious optimism ahead: SIAM’s Shailesh Chandra

The Indian automobile industry posted a flat performance in the first quarter of FY26, with overall growth holding steady at 0.1% on a sequential basis, said Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM). While the passenger vehicle (PV) segment crossed the one million unit mark for the second time in three years, the segment witnessed a marginal 1.4% sequential decline due to a slowdown towards the end of the quarter.Two-wheeler sales were a weak spot, which Chandra attributed to “inventory correction.” Despite this, he noted that mass mobility demand and easier financing have helped maintain overall momentum.

“Cargo three-wheeler registrations are showing strong EV-led growth,” Chandra said, adding that “goods carriers are marginally more affordable” compared to passenger carriers, which continue to remain expensive on-road. He acknowledged that pricing remains a constraint, but said the industry remains “cautiously optimistic.”

On the ongoing crisis around rare earth magnets (REMs), Chandra highlighted that the challenges faced by importers are due to licensing delays. “More than 30 applications are awaiting clearance from Chinese suppliers,” he said, citing “historical commerce issues with China” that are compounding the uncertainty. He added, “The industry is relying on ministry support to resolve licensing delays,” while manufacturers manage disruptions by tapping into existing stocks and exploring alternative sourcing strategies.
Also Read: Tesla Model Y price starts at ₹59.89 lakh for India — specifications and other details hereLooking ahead to the second quarter, Chandra said, “The industry outlook for Q2 remains cautiously optimistic,” buoyed by the upcoming festive season and a forecast of above-normal monsoon. These factors are expected to support rural recovery and lift entry-level and two-wheeler sales.

However, the supply-side risks remain, especially due to China’s restrictions on REM exports, he added.

Commenting on shifting consumer behaviour, Chandra said, “Car prices are rising due to new technology, stricter regulations, and larger builds,” leading to a clear shift towards bigger and more feature-rich vehicles. “The trend of bigger cars with advanced features continues,” he said, adding that “action is shifting to series launches, with less momentum on the purchase side.” This, he noted, may lead to a “natural shift in share price trends” as buyer preferences evolve.

On exports, SIAM expects growth to enter double digits, driven by strong demand from Gulf Cooperation Council (GCC) countries and the opening up of new markets.

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