India's auto sector sees a silver lining in festive season sales despite Q1 declines.

India's auto sector, including passenger vehicles and two-wheelers, anticipates a boost during the festive season and rural recovery in the second half of 2025-2026. The Society of Indian Automobile Manufacturers (SIAM) reports that an above-normal monsoon will aid rural income recovery, benefiting two-wheelers and entry-level vehicles. The Reserve Bank of India's repo rate cuts are expected to ease borrowing costs. Despite a 1.4% decline in passenger vehicle sales and a 6.2% drop in two-wheelers in Q1, the sector is optimistic due to the festive season and improved consumer sentiment. Supply-side challenges, like China's rare earth magnets export restrictions, remain a concern.