India’s auto sector is once again shifting gears. September 2025 sales and Q2 FY26 performance reveal a strong demand revival, helped by the efficiencies of GST 2.0 that are streamlining supply chains and boosting consumer confidence. From two-wheelers to passenger vehicles and commercial vehicles, the momentum looks broad-based, though premiumisation trends stand out as the key driver.
Two-Wheelers: Premium Brands Take the Lead
In the two-wheeler (2W) segment, industry leaders Hero MotoCorp, TVS Motor, and Bajaj Auto reported steady gains, reflecting rising affordability and festive-season tailwinds. The real standout, however, was Eicher Motors, which clocked an impressive ~43% year-on-year growth.
This signals a clear shift toward premiumisation in India’s two-wheeler market, where aspirational buyers are upgrading from entry-level commuter bikes to higher-end motorcycles.
Passenger Vehicles & SUVs: Tata, Maruti, and M&M Shine
The passenger vehicle (PV) segment continues to ride the SUV wave. Tata Motors and Maruti Suzuki delivered double-digit growth, while Mahindra & Mahindra sustained momentum with strong SUV sales.
This reinforces the trend of consumers prioritizing bigger, feature-loaded vehicles over compact cars. With demand holding up despite elevated interest rates, the segment looks resilient going into the festive quarter.
Commercial Vehicles: Mixed but Stable Outlook
In commercial vehicles (CVs), Bajaj Auto’s CV sales posted healthy growth, highlighting strong demand in urban and semi-urban markets. Ashok Leyland and Hyundai maintained steady but softer growth, while Eicher Motors’ CV segment stayed largely flat.
Though CV sales were mixed, the underlying theme is stability, suggesting that infrastructure push, logistics demand, and rural consumption are balancing out sector headwinds.
GST 2.0: A Structural Tailwind
Beyond raw numbers, the common thread in this recovery is the GST 2.0 framework. With simplified compliance and smoother supply chains, automakers are seeing operational efficiencies that support both topline growth and margin improvement.
The ability to scale faster, maintain leaner inventory cycles, and distribute more effectively is adding another layer of strength to India’s auto revival story.
Key Takeaways for Investors
- Consumption engine is firing: Rising demand across 2Ws, PVs, and CVs
- Premiumisation trend is clear: Eicher’s ~43% surge underscores the shift
- SUVs remain growth drivers: Tata, Maruti, and M&M are leading the way
- GST 2.0 impact is real: Supply chain efficiency is translating into scale
For investors, India’s auto sector remains one of the most compelling cyclical plays into FY26, with premium brands and SUV-heavy portfolios best placed to outperform.
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