- Two-Wheeler Momentum Strong, But Cost Risks Loom

February 2026 was a strong month for India’s automobile sector, with robust sales across commercial vehicles (CVs), passenger vehicles (PVs), and two-wheelers. Tata Motors stood out, posting industry-leading growth in both CVs and PVs, aided by replacement demand and new launches. While consumer sentiment remains buoyant, analysts caution that rising commodity costs, particularly steel, could pressure margins in FY27 unless price hikes are implemented. Commercial Vehicles (CVs) -

: Domestic CV sales +32.8% YoY to 40,893 units. - : Domestic CV sales +28% YoY to 20,314 units. - Drivers: Replacement cycle demand (fleet age now 9–10 years vs. 7–7.5 pre-Covid), stable freight rates. - Truck Freight Index: +8% YoY in February, flat sequentially. Passenger Vehicles (PVs) - Tata Motors: Domestic PV sales +34% YoY to 62,329 units. - Boosted by launch of New Sierra SUV; Nomura estimates ~10,000 monthly volumes. - Electric Sierra launch planned within six months. - : Domestic PV sales flat at 161,000 units. - Small cars: -8% YoY to 76,624 units. - Utility vehicles: +12% YoY to 72,756 units. - Signs of waning GST-cut euphoria in entry-level segment. - Hyundai: +10% YoY growth. - Mahindra & Mahindra: +19% YoY growth. Two-Wheelers - : Domestic sales +45% YoY to 558,216 units (ICE-led growth). - TVS Motor: Domestic sales +32% YoY to 365,471 units; EV sales +60% YoY to 38,386 units. - : Domestic sales +27% YoY to 186,164 units. - Eicher Motors (Royal Enfield): Moderate growth +13% YoY to 91,248 units. Outlook & Risks - Commodity costs: Steel up ~200 bps as % of ASP (Sept–Jan). - Scope for price hikes, but risk of dampening entry-level demand. - Low-base effect post-GST cuts to support strong growth till September. - CV makers may be better placed than PV peers due to limited competition and necessity-driven replacement demand.