JM Financial noted that the utility vehicle segment had continued to outperform the broader passenger vehicle market. The growing share of these vehicles has become a key feature of the industry’s recent performance.
New Delhi: Nearly seven out of every 10 passenger vehicles sold in India in the year-to-date period of FY2026-27 were utility vehicles, as the segment continued to drive growth in the country’s passenger vehicle market, according to a report by JM Financial.
The report highlighted that the passenger vehicle volumes grew 22 per cent year-on-year in September 2026, while growth during April-September 2026 stood at 28 per cent. Utility vehicles remained the main growth driver, with volumes increasing 31 per cent during the year-to-date period, compared with 23 per cent growth in cars. The strong performance of utility vehicles increased their share of total passenger vehicle volumes to around 68 per cent in FY2026-27 so far, highlighting the growing importance of the segment in India’s automobile market.
In its report, JM Financial said, “Domestic PV volumes rose a healthy 22 per cent YoY in Sep’26, with YTDFY27 growth at 28 per cent. Growth was broad-based, with cars increasing 14 per cent YoY and UVs registering a stronger 26 per cent growth. On account of its sustained outperformance, the UV mix in PVs increased to approx. 69 per cent in Sep’26 vis-à-vis approx. 67 per cent in Sep’25”.
The report also highlighted the strong performance of utility vehicles in September. Domestic passenger vehicle volumes rose 22 per cent year-on-year during the month, with cars growing 14 per cent and utility vehicles registering stronger growth of 26 per cent. As a result, utility vehicles accounted for around 69 per cent of passenger vehicle volumes in September 2026, compared with approximately 67 per cent in September 2025.
JM Financial noted that the utility vehicle segment had continued to outperform the broader passenger vehicle market. The growing share of these vehicles has become a key feature of the industry’s recent performance.
Two-Wheeler Market
The report also pointed to differences in demand across the two-wheeler market. Domestic internal combustion engine (ICE) two-wheeler volumes grew 11 per cent year-on-year in September 2026, while growth during April-September 2026 stood at 13 per cent. Scooters continued to outperform motorcycles, with domestic ICE scooter volumes rising 19 per cent year-to-date, compared with 10 per cent growth in motorcycles. Within the motorcycle segment, models above 150cc remained the main growth driver, while recent price increases were affecting demand for entry-level motorcycles.
Commercial Vehicle Segment
The commercial vehicle segment also recorded strong growth. Domestic volumes rose 29 per cent year-on-year in the second quarter of FY2026-27, while year-to-date growth stood at 24 per cent, supported by healthy demand across segments.
Key Concerns
Despite the strong demand across vehicle categories, the report flagged rising input costs as a key concern for automakers. The report said renewed conflict in West Asia had kept cost pressures elevated, which could limit margin expansion in the near term.
The brokerage also noted that most original equipment manufacturers covered in its report had less than one month of channel inventory ahead of the festive season. This could leave automakers with minimal inventory after the festive period and support stronger dispatches in the fourth quarter of FY2026-27. However, the report expects demand to remain strong in the second half of the financial year while growth rates moderate.