New Delhi : India’s automobile retail sector delivered its best-ever February performance, with total vehicle sales reaching 24,09,362 units, marking a 25.62% year-on-year growth, according to the latest retail data released by the Federation of Automobile Dealers Associations (FADA).
The strong performance reflects improving consumer confidence following GST 2.0 reforms, robust rural demand, and stronger alignment between wholesale dispatches and retail sales across segments. According to FADA, five of the six major vehicle categories — two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors — recorded their highest February retail volumes ever, highlighting sustained momentum in the automotive market.
Segment Performance
Two-Wheelers Lead Volumes
Two-wheelers remained the largest segment, registering 17,00,505 units, a 25.02% year-on-year increase. Demand was broad-based, with urban sales growing 28.96% and rural markets expanding 22.16%.
Dealers attributed the growth to improved rural liquidity following good crop outcomes, attractive promotional schemes, and increased affordability after GST revisions.
Passenger Vehicles Gain Strong Rural Momentum
Passenger vehicle (PV) sales stood at 3,94,768 units, recording 26.12% YoY growth.
Interestingly, rural PV demand surged 34.21%, outperforming urban growth of 21.12%, indicating expanding vehicle penetration beyond metropolitan markets. SUVs and utility vehicles continued to dominate overall sales.
PV inventory levels also improved significantly, falling to 27–29 days, moving closer to FADA’s recommended 21-day inventory benchmark, signalling healthier wholesale-retail alignment.
Commercial Vehicles Reflect Economic Activity
Commercial vehicle retail sales reached 1,00,820 units, rising 28.89% YoY.
The growth was supported by:
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Strong freight movement
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Expanding e-commerce logistics
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Infrastructure-driven demand
Fleet operators also accelerated purchases amid improved sentiment following GST changes.
Tractors Record Fastest Growth
The tractor segment emerged as the fastest-growing category, with 89,418 units sold, marking a sharp 36.35% YoY increase.
The surge reflects healthy agricultural income, improved rural sentiment, and strong farm equipment demand.
Construction Equipment Sees Slight Dip
Construction equipment was the only segment to miss a record February, reporting 6,721 units, down 1.22% YoY.
However, the overall industry outlook remains positive due to continued infrastructure spending.
Industry Outlook
FADA’s dealer survey indicates strong optimism for the near term.
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75.51% of dealers expect growth in March 2026
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19.90% anticipate stable demand
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Only 4.59% foresee a decline
Demand is expected to be supported by multiple festivals including Navratri, Ramzan, Ugadi, Gudi Padwa and Eid, along with the traditional financial year-end buying cycle.
For the March–May 2026 period, 67.35% of dealers expect continued growth, though sentiment has become slightly more measured compared to earlier months, suggesting the industry may transition from a sharp rebound phase to more stable growth.
Market Sentiment and Liquidity
Dealer sentiment remains largely positive:
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58.67% report good market sentiment
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54.59% report good liquidity
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Around 10% report weak conditions
This indicates a broadly healthy ecosystem for retail vehicle sales across the country.