New Delhi, Aug. 18 -- The automobile sector witnessed a muted performance in the first quarter of FY26, with demand lagging expectations in most segments except tractors, according to a report by Motilal Oswal Financial Services.

The report mentioned that the domestic volumes for the auto segment, excluding tractors, declined 6 per cent year-on-year (YoY) in 1Q. Weakness in urban demand was the key factor behind the underperformance, led largely by two-wheelers.

It stated "Demand lags expectations in most sectors except for tractors".

The 2W segment recorded an 8 per cent YoY decline in volumes in the first quarter of the current FY26, while both passenger vehicles (PVs) and commercial vehicles (CVs) saw a 1 per cent fall each.

Three-...