2Ws, CVs or passenger cars? Emkay picks its winners

India's two-wheeler and commercial vehicle segments are projected to outshine passenger vehicles in FY27, according to a report by Emkay. The report attributes this to robust demand, favorable pricing flexibility, and limited new passenger vehicle launches within the fiscal year.

India's automotive industry, excluding tractors, witnessed steady growth, with select original equipment manufacturers (OEMs) leading the charge across various segments. Commercial vehicle (CV) and passenger vehicle (PV) growth remained widespread, while retail momentum persisted across all segments.

Two-wheeler (2W) retail sales demonstrated impressive strength, increasing by 33 percent year-on-year, up from 22 percent in the second half of FY26, 29 percent in July 2026, and 21 percent in August 2026. Passenger vehicle (PV) sales also exhibited solid growth across OEMs, driven by Maruti Suzuki India Limited (MSIL), which achieved a 30 percent year-on-year increase in domestic sales.

Medium and heavy commercial vehicle (MHCV) retail sales showed robust momentum, surging by 50 percent year-on-year, compared to 30 percent in July 2026 and 29 percent in August 2026. However, tractor volumes across manufacturers declined, with Escorts and Mahindra & Mahindra (M&M) reporting year-on-year drops of approximately 17 percent and 21 percent, respectively.

Emkay's report highlights that while overall vehicle volumes remained healthy, year-on-year growth appeared softer due to the timing of the festive season. Diwali occurred in November 2026, as opposed to October 2025, and a high September 2025 base persisted owing to purchase deferments in August following a Goods and Services Tax (GST) reduction.

Despite a similar demand trajectory, Emkay's analysis favors two-wheeler and commercial vehicle OEMs over passenger vehicles, citing better pricing flexibility amid commodity pressures and a limited pipeline of new PV models in FY27.