Auto retail sales rise 17.5% in August; alternative-fuel vehicles overtake petrol for first time

Vehicle retail sales in India rose 17.51% year-on-year to a record 24.23 lakh units in August as passenger vehicle sales crossed the four-lakh mark for the first time in the month, industry body FADA said on Monday.

According to data released by the Federation of Automobile Dealers Associations (FADA), total vehicle retail sales stood at 24,23,201 units in August, compared with 20,62,038 units in the year-ago period.

On a sequential basis, however, overall retail sales declined 6.48% from 25,91,138 units in July.

The two-wheeler segment recorded its best-ever August sales at 17,14,610 units, up 19.69% year-on-year.

Passenger vehicle (PV) sales rose 16.14% to 4,02,398 units, crossing the four-lakh mark for the first time in an August.

Commercial vehicle sales increased 14.45% to 90,769 units, while three-wheelers grew 8.64% to 1,22,281 units. Tractors were largely flat at 87,977 units, up 0.84%.

Alternative-fuel vehicles comprising CNG, hybrids and electric vehicles accounted for 41.95% of PV retail sales in August, overtaking petrol vehicles at 40.85% for the first time, FADA said.

CNG accounted for 25.28% of PV sales, followed by hybrids at 9.04% and electric vehicles at 7.63%.

Petrol vehicles had a 40.85% share, while diesel accounted for 17.21%.

“We would, however, read the headline with discipline: much of the YoY strength rests on a soft August 2025 base, when buyers had deferred purchases awaiting the GST 2.0 rate cut, and dealers report that the festive curtain-raiser came in below their own expectations,” FADA President Sai Giridhar said.

“The true test of the season lies in showroom conversion through September to November, not in year-on-year optics,” he added.

He said rural demand continued to outperform urban demand across vehicle categories, with rural PV sales rising 24.99% against 10.93% growth in urban markets.

Total electric vehicle retail sales across categories reached a record 2,98,448 units in August, up 52.9% from the year-ago period.

EVs accounted for about 12.3% of overall vehicle retail sales, compared with 9.5% a year earlier.

In two-wheelers, EV penetration rose to 10.68% from 7.66% a year earlier, crossing the 10% mark in a non-festive month for the first time.

However, tractor sales remained under pressure from weak monsoon conditions.

Tractor retail sales fell 25.03% month-on-month despite being marginally higher year-on-year.

Passenger vehicle inventory also rose by around five days from July-end to 38-40 days, well above FADA's recommended 21-day level.

According to FADA, 67.09% of dealers expect vehicle sales to grow in September, while 27.35% expect a flat market and 5.56% foresee a decline.