Fuel price hikes may cool auto demand despite strong sales

IMPACT LIKELY TO BE MORE PRONOUNCED IN ENTRY-LEVEL PVs

- AKBAR MERCHANT

RISING FUEL PRICES, vehicle price increases and inflation are likely to moderate demand across segments in the coming months, even as automobile sales remain strong currently, according to Nomura’s May 2026 auto sales preview.

The brokerage said the impact is expected to be more pronounced in entry-level passenger vehicles and commuter motorcycles, where affordability remains a key purchase consideration. It also flagged risks for commercial vehicles as higher diesel prices raise operating costs for fleet operators.