El Nino threatens rural auto demand; ICRA cuts FY27 tractor and two-wheeler volume forecasts
Weak, uneven monsoon (12% below LPA) pressures farm incomes and rural auto buying. ICRA sees two-wheeler volume growth slowing to 3-5% in FY27 (vs 10.2% FY26) and tractors to 1-4% (vs 23.5% FY26). Mahindra, TVS and CNH brace for softer demand, with the festive season the key swing factor.
Tractor and two-wheeler makers (Mahindra, TVS, CNH) brace for weaker rural demand as El Nino and uneven monsoon threaten farm incomes. ICRA cuts FY27 volume growth forecasts; festive-season demand seen as key variable for rural auto retail.