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India\u2019s Light Vehicle (LV) market moderated in February 2026, reflecting the typical post-January normalization after strong start-of-year dispatches. Despite the sequential pullback, underlying demand remained healthy, with wholesales rising by 12% year-on-year (YoY). However, the selling rate eased to an annualized 5.6 million units, down 5% month-on-month (MoM).<\/p>\n Total LV wholesales reached an all-time February high of 485k units, representing a MoM decline of 7%, but a YoY rise of 12%. Passenger Vehicle (PV) sales declined by 7% MoM but rose by 11% YoY to 414k units, while Light Commercial Vehicle (LCV) volumes (\u22646T gross vehicle weight) reduced by 5% MoM and grew by 18% YoY to 70k units, highlighting broad-based strength across segments.<\/p>\n February\u2019s outcome was supported by healthy retail off-take, lean dealer stocks, and demand carryover linked to GST-led affordability gains. Consumer preference continued to skew toward SUVs and Compact SUVs, while resilient rural and Tier-2\/3 demand provided additional support. That said, rising geopolitical tensions in the Middle East are becoming a clearer watchpoint, with early signs of disruption to supply chains, logistics routing, and energy costs beginning to influence production planning, lead times, and export flows.<\/p>\n On the retail side, PV registrations rose to 395k units (+26% YoY) and LCV volumes increased to 56k units (+24% YoY), according to the Federation of Automobile Dealers Associations (FADA). This indicates solid conversion of enquiries into deliveries and suggests that wholesales were largely aligned with end-demand rather than channel stocking.<\/p>\n Dealer inventory tightened further, with PV inventory easing to 27\u201329 days by the end of February, closer to FADA\u2019s 21-day benchmark. This reflects improved channel discipline, supported by strong SUV demand, a gradual recovery in entry-level segments, and better product availability. Higher enquiry conversion also points to healthier retail absorption, though selective OEM price hikes could weigh on near-term demand.<\/p>\n We have slightly downgraded our Indian LV outlook to reflect a more cautious external environment and potential cost pressures. Sales are now forecast to grow by 7% YoY to 5.5 million units in 2026, with PVs up 7% YoY and LCVs up 5% YoY. Total LV sales are projected to reach 6.9 million units by 2032, supported by rising urbanization, wider model availability, and improving financing access.<\/p>\n Seasonal March factors (including Holi, Gudi Padwa, and Navratri) and year-end depreciation benefits should support demand and production. However, the conflict in the Middle East keeps risks high, potentially sustaining elevated oil\/LNG prices and disrupting trade routes. For India, this could raise import-driven energy, logistics, and manufacturing costs, while instability in shipping corridors may weigh on exports and add supply-chain uncertainty. As such, we will continue to monitor developments and update our outlook accordingly.<\/p>\n<\/p><\/div>\n