Citi sees macro tailwinds driving Indian auto sales in 2026

Hyundai Motor India

15/12/2025 08:54

** Macro factors, including GST, interest rate cuts and income tax restructuring, to continue supporting Indian auto sales in 2026, Citi says

** Brokerage sees car sales rising 5.1% in FY26 and 5.2% in FY27; annual two-wheeler sales up to March 2026 seen growing 5.5% and 7% the following year

** Car market leader Maruti Suzuki MRTI.NS Citi's top pick, followed by Mahindra & Mahindra MAHM.NS and Hyundai Motor India HYUN.NS

** All stocks rated "buy" on average - data compiled by LSEG

** However, automakers' gross margins likely to dip in 2026 as they navigate segment competition as well as rising costs after a stable 2025 - Citi

** Adds, uncertainty around geopolitics and global demand a negative for Jaguar Land Rover owner Tata Motors Passenger Vehicles TAMO.NS as well as auto parts makers

** Regulations on emissions a key monitorable in 2026 - Citi

** Auto stocks .NIFTYAUTO up ~21% YTD, outperforming blue-chip Nifty 50 .NSEI index's 10% climb

 (Reporting by Nandan Mandayam in Bengaluru)

 ((Nandan.Mandayam@thomsonreuters.com; Mobile: +91 9591011727;))