Indian auto sector likely to log positive growth in April-June despite global uncertainty
New Delhi: The Indian auto retail industry is projected to register positive growth in the first quarter this fiscal (Q1 FY27) despite geopolitical uncertainty, riding on the marriage season in the northern belt, rabi harvest and the residual benefit of GST 2.0-led affordability, a new report said on Monday.
Looking at the April–June period, the retail outlook remains cautiously positive, said the Federation of Automobile Dealers Associations (FADA).
“Our survey shows 49.81 per cent of dealers expecting growth, with 40.52 per cent expecting flat performance and 9.67 per cent anticipating de-growth — a distribution that reflects awareness of near-term headwinds even as the underlying structural demand remains intact,” said FADA.
When asked about FY27 as a whole, confidence improves meaningfully — 74.72 per cent of dealers expect growth, with the consensus clustering in the 3–7 per cent band.
“This suggests that the dealer community views the current uncertainty as transitional rather than structural, and that the medium-term India demand story remains well-anchored,” the report mentioned.
Demand over the next three months will be shaped by several cross-currents. On the positive side, the marriage season will support retail in the northern belt through May, new model launches — particularly in the passenger vehicle (PV) and two-wheeler (2W) segments — will sustain enquiry pipelines, and the residual benefit of GST 2.0-led affordability should continue to support conversions.
The rabi harvest, which is largely complete, should improve hinterland cash flows and sustain rural demand in the near term. Weather conditions — with the IMD forecasting normal-to-slightly-below-normal April temperatures — should support agricultural sentiment and mobility demand, said the report.
On the risk side, three factors dominate dealer concerns. The most cited risk (40.5 per cent) is overall economic slowdown and consumer sentiment decline — a macro concern that reflects the cascading effects of geopolitical uncertainty on consumer confidence.
The second-most cited risk (30.5 per cent) is OEM supply disruption and model unavailability, a direct consequence of the West Asia conflict’s impact on global logistics, component supplies, and production schedules.
The accelerating interest in EV and CNG vehicles — reported by 56.9 per cent of dealers — is an important structural signal within this environment.
“Overall, we expect Q1 FY27 to be a period of moderate but healthy growth, with the sector normalising after the sharp re-rating of H2 FY26,” the FADA report mentioned.
