Auto Registrations Drop 21.9% as EV Penetration Hits 6.7%

Market Trends

Passenger vehicle registrations fell 21.9% year-on-year over Navratri 2026, which the notes put down to a shorter festive window. In the same period, electric cars took 6.7% of passenger vehicle registrations, up from 4.2% a year earlier. Fewer cars were registered, and more of them were electric.

Across all vehicle types, registrations fell 6.5%. Two-wheelers held up best, down only 2.8%, and electric two-wheeler registrations rose 33.4% to 75,758 units, helped by better affordability and a wide spread of makers selling them.

A Shorter Festival Cut Car Registrations by a Fifth

The notes treat the fall as a calendar effect more than a demand one: dealer checks still point to mid-to-high single-digit growth for passenger vehicles over the full festive season, with new launches such as the Brezza and Baleno drawing bookings and entry-level cars selling steadily. Order books for entry-level cars and SUVs run beyond the festive weeks, and replacement buying and GST-led affordability support demand for the rest of FY27.

Dealer stock is broadly normal for passenger vehicles but slightly thin for the festive season, and dealers are offering discounts to keep sales moving. The base is high: last year's festive season carried pent-up demand released by the GST cuts and an early Diwali, so the clearer read on the trend comes only after the season ends.

Electric Cars Gained Share as Volumes Fell

Electric demand is running ahead of supply at some dealers, with models such as the Punch and Tiago out of stock. A consumer survey in the notes shows why: technology features now rank above brand as the top factor in a car purchase, and they decide the choice in the ₹15–30 lakh band. Interest in battery-electric cars reached 57% among all buyers surveyed and 61% among Gen Y, and 82% of battery-electric test drives turned into a purchase. Brand still counts: 68–71% of buyers consider only established names.

What the Notes Say About Mahindra, Maruti and TVS

Mahindra & Mahindra drew better demand commentary than other carmakers in dealer checks, with encouraging bookings for its new launches. Maruti Suzuki India received a tax tribunal order that cuts its contingent liabilities. TVS Motor Company is cited for a broad mix across petrol two-wheelers, electric models, exports and three-wheelers, which the notes credit for growth above the industry's.

Loan Rates and Input Costs Are the Pressure Points

A higher interest-rate regime raises the cost of car loans and weighs on affordability. Elevated crude prices raise crude-linked input costs, a margin risk for carmakers and their component suppliers. Retail registrations are also running weaker than the deliveries carmakers report, a gap that shows up as dealer stock if it persists. Against that, the notes expect the commodity cycle to peak and carmaker margins to widen in the second half of FY27.

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