Jefferies Report Highlights Divergent Trends in India's Festive Auto Sales with Two-Wheelers Outperforming Passenger Vehicles

India's automobile sector has exhibited mixed demand trends during the initial fortnight of the festive season, according to a market report by Jefferies. The data highlights a distinct divergence in performance across different vehicle segments, with two-wheelers showing strong outperformance despite a high base.

According to the Jefferies report, two-wheeler registrations increased by 16 per cent year-on-year during the first 14 days of the festive period. This performance follows a strong first half of the financial year (1HFY27, spanning April to September), during which two-wheeler registrations grew 22 per cent year-on-year, and wholesales rose 17 per cent year-on-year.

In contrast, the passenger vehicle (PV) segment experienced a moderation in demand during the second week of the festive season. This followed a healthy 7 per cent year-on-year growth in PV registrations during the first seven days. The slowdown comes after a robust 1HFY27 period, where both passenger vehicle registrations and wholesale sales registered year-on-year growth of 28 to 29 per cent, or over 25 per cent as noted in the broader metrics.

Commercial and agricultural vehicle segments displayed notable growth during the opening fortnight of the festivities. Truck and tractor registrations surged 76 per cent year-on-year. This sharp increase was partly aided by a low base effect, given that registrations had dropped by 26 per cent during the corresponding period of the previous year. When compared against the figures from 2024, truck registrations grew at a compound annual growth rate (CAGR) of 14 per cent over the first half of the festive period.

Similarly, tractor registrations posted a 21 per cent year-on-year increase during the festive window, building on an 18 per cent rise recorded in 1HFY27. However, the report points out that challenges may lie ahead for the tractor segment in the second half of FY27, driven by a high base and concerns stemming from weak monsoon conditions.

"The divergence in festive auto sales provides a clear indicator of shifting consumer spending patterns across urban and rural markets in India. While the strong momentum in two-wheelers, trucks, and tractors points to resilient rural and commercial activity, the moderation in passenger vehicles suggests that urban buyers are exercising caution. Businesses operating within the automotive and allied supply chains must closely monitor these segment-specific shifts to manage inventory and capital allocation effectively over the remainder of the fiscal year." — Dr. Shishir Gupta, Founder & CEO, StartupLanes