The domestic automobile industry body on Friday flagged the ongoing conflict in West Asia as a key concern for the sector, warning that the situation could disrupt supply chains and affect manufacturing as well as exports in the coming months.
The Society of Indian Automobile Manufacturers (SIAM) said the industry will closely monitor geopolitical developments, even as domestic vehicle dispatches posted strong growth in February.
Record Domestic Performance
“While the month of March has festive drivers in several parts of the country, the recent conflict in West Asia remains a concern, both from the perspective of supply chain, which could impact the manufacturing processes and exports,” said Rajesh Menon, Director General, SIAM.
Despite the concerns, the industry maintained positive momentum during the month. According to SIAM data, domestic passenger vehicle dispatches from manufacturers to dealers rose 10.6% year-on-year to 4,17,705 units in February, compared with 3,77,689 units in the same month last year.
Menon said positive market sentiment continued to support demand across vehicle segments.
“Passenger vehicles, two-wheelers and three-wheelers posted their highest ever sales for the month of February in 2026, with double-digit growth compared to February 2025,” he said.
Within the passenger vehicle segment, growth was largely driven by utility vehicles, whose dispatches rose 13.5% to 2,36,957 units in February from 2,08,795 units in the year-ago month.
However, passenger car dispatches declined 3.8% to 1,06,799 units last month, compared with 1,10,966 units in February last year.
Two-wheeler sales saw a strong uptick, rising 35.2% year-on-year to 18,71,406 units in February, up from 13,84,605 units in the corresponding month of 2025.
Motorcycle sales increased 30.8% to 10,96,537 units last month from 8,38,250 units a year earlier. Scooter sales also recorded robust growth, rising 42.3% to 7,29,774 units compared with 5,12,783 units in February last year.
Three-wheeler dispatches to dealers grew 29% year-on-year to 74,573 units in February, up from 57,788 units in the same period last year.
SIAM said the industry remains optimistic about demand in the near term, supported by festive buying in several parts of the country during March, even as companies remain cautious about potential supply chain disruptions due to geopolitical tensions.
Industrial Fuel Crunch
The public acknowledgement of mounting pressure comes days after the industry body made a representation to the Centre. In a letter sent on March 10 to Petroleum Secretary Neeraj Mittal, the Society of Indian Automobile Manufacturers (SIAM) urged the Ministry of Petroleum and Natural Gas to restore the allocation of LPG, PNG and propane to vehicle manufacturers and their ancillary units.
The industry body said assured access to these fuels is critical for maintaining uninterrupted manufacturing operations.
SIAM noted that automobile production relies heavily on these gaseous fuels for processes requiring stable and controllable heat. Any uncertainty in supply, it said, could affect production planning and disrupt supply chains across the sector.
Similar concerns have also been raised by the Automotive Component Manufacturers Association of India (ACMA), which has written to the Ministry of Heavy Industries highlighting supply disruptions for component manufacturers, particularly foundries and forging units.
ACMA said many MSME component manufacturers depend on LPG and PNG for daily operations and have limited ability to quickly switch to alternative fuels.
“Any disruption or uncertainty in the availability of LPG or PNG could impact production schedules of critical automotive components,” the association said in its letter to the MHI.