Auto companies poised for best May in eight years as retail momentum continues

The automobile retail market has continued its strong run in May 2026, with vehicle registrations holding firm across segments despite lingering concerns around inflation and global uncertainty.

The VAHAN registration data for May 1 to May 25 indicates that the industry is headed for its strongest May performance since 2018, with most automakers already surpassing their entire May 2025 registration levels.

Total vehicle registrations stood at nearly 19.75 lakh units during the first 25 days of May, up 11.6%from last year's 17.7 lakh units. The momentum was broad-based, with every key segment posting healthy double-digit or near double-digit growth.

Two-wheelers, which remain the largest contributor to overall industry volumes, registered 14.53 lakh units, up 9% from the year-ago period.

While growth remained healthy across the board, market share trends suggest a shift within the segment. TVS Motor and Bajaj Auto are seen gaining market share, aided by a stronger product mix and sustained rural demand.

Hero MotoCorp, however, is estimated to lose over 100 basis points of market share during the month. Royal Enfield registrations also remained under pressure, largely in line with expectations, owing to production disruptions that impacted dispatches during the month.

The electric two-wheeler segment continues to remain a key highlight. Ather Energy’s strong momentum appears to be sustaining for another month, while Ola Electric is set to cross the 10,000-unit monthly registration mark for the third consecutive month indicating improving stability in volumes after a volatile FY26 start.

Passenger vehicles (PV) are emerging as the biggest outperformer in May.

PV registrations surged 23% to 3.62 lakh units compared to 2.95 lakh units a year ago. Importantly, all major passenger vehicle manufacturers have already crossed their respective May 2025 registration levels even before the month ends.

Maruti Suzuki and Hyundai are seen outperforming the broader market, aided by improved supply and healthy demand across utility vehicle and compact segments. Mahindra & Mahindra’s passenger vehicle business also continued to witness healthy traction, supported by strong SUV demand and pending order execution. Tata Motors’ PV division too is expected to post robust growth during the month.

Commercial vehicle registrations also remained healthy, rising 14%to 62,598 units from the previous year. Within this, medium and heavy commercial vehicles (M&HCVs) grew 15% to 23,240 units.

Both Tata Motors and Ashok Leyland have already crossed their May 2025 registration levels, suggesting stable freight movement and replacement demand despite concerns around economic slowdown in certain sectors.

Three-wheeler registrations remained one of the strongest-performing categories, climbing 19% to 95,400 units from last year. The segment continues to benefit from improving urban mobility demand and sustained adoption of electric three-wheelers.

The tractor segment, however, showed mixed trends. Mahindra & Mahindra’s tractor registrations have already crossed May 2025 levels, indicating healthy rural sentiment in parts of the country. On the other hand, Escorts Kubota continues to trail last year’s levels by nearly 10%, reflecting uneven demand patterns across regions.

Overall, the May registration trends suggest that domestic automobile demand remains resilient across segments. With most OEMs already surpassing year-ago monthly levels and multiple categories clocking double-digit growth, the industry appears firmly on track for one of its strongest May performances in nearly a decade.

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