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State-wise demand trends in 1QFY26

Our analysis of state-wise demand trends for 1QFY26 reflects (1) muted demand trends in the PV segment driven by weakness in north, east and south, (2) a decline in the 2W segment; southern and eastern regions continued to underperform, (3) weakening demand in M&HCV—a 15% yoy decline in east, (4) flat LCV demand—a decline in Assam and Gujarat and (5) a yoy increase in the scooter mix across most regions.

Passenger vehicles: 1.3% yoy decline in volumes in 1QFY26

* Industry volumes declined by 1.3% yoy in 1QFY26 due to muted demand trends in entry-level variants across segments. Volumes in northern, southern and eastern regions declined by 2-3% yoy in 1QFY26, while volumes in west remained stagnant yoy. Volumes in most of the key states posted a muted trend, whereas states such as Uttar Pradesh, Gujarat, Rajasthan, Madhya Pradesh and Punjab witnessed mid-single-digit yoy increases in volumes, while Delhi, Andhra Pradesh and Telangana witnessed 7-11% yoy volume declines in 1QFY26.

* MSIL lost 200 bps yoy market share in 1QFY26 (excluding sales to Toyota), as the company ceded market share in the southern states—Karnataka (-550 bps yoy), AP and Telangana (-430 bps yoy), and Tamil Nadu (-210 bps yoy). M&M/Toyota Motors gained 290/120 bps market share yoy in 1QFY26.

Two-wheelers: 6.3% yoy decline in volumes in 1QFY26

* Industry volumes declined by 6.3% yoy in 1QFY26 due to muted demand trends in the entry-level motorcycle segment, partly offset by growth in premium motorcycle and scooter segments. In terms of regions, north volumes grew by 2% yoy, whereas south volumes declined by 13% yoy. Eastern and western regions witnessed 6-8% declines yoy.

* Scooter mix in two-wheeler volumes increased by 210 bps yoy in 1QFY26, owing to an increase in scooter mix in west and south. Scooter mix increased to 54.9% (+530 bps yoy) in south and 460 bps yoy in west.

* TVS Motor gained 300 bps yoy market share, partly on account of a lower base and strong demand for the scooter segment, while Bajaj Auto lost 30 bps yoy market share and HMCL lost 180 bps yoy market share in 1QFY26 (production cuts). Royal Enfield volumes increased 12% yoy, driven by strong performance across regions, especially in north and east in 1QFY26.

M&HCVs/LCVs: (-)2.7%/+0.7% yoy change in volumes in 1QFY26

* CVs saw a mixed bag overall, registering a 0.6% yoy volume decline in 1QFY26, with M&HCV volumes declining by 2.7% yoy in 1QFY26 due to the eastern region witnessing a 15.3% yoy decline. AL market share increased 20 bps yoy, whereas Tata Motors’ market share declined by 280 bps yoy in 1QFY26.

* LCV industry volumes increased marginally by 0.7% yoy despite a 6.6% yoy decline in the eastern region in 1QFY26. M&M gained 150 bps yoy in market share, whereas Tata Motors lost 420 bps yoy in market share in 1QFY26.

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