India auto retail sales hit record 2.96 crore in FY26, up 13.3%: FADA

Automobile retail sales in India touched an all-time high of 2.96 crore units in FY2025-26, registering a robust 13.3% year-on-year growth and coming close to the 3-crore milestone, dealers’ body Federation of Automobile Dealers Associations (FADA) said on Monday.

The strong performance was driven by broad-based growth across segments, with five of the six vehicle categories recording their highest-ever annual sales.

Two-wheelers, which make up the bulk of India’s auto market, rose 13.4% to 21.42 million units, surpassing pre-pandemic peaks.

Passenger vehicle sales climbed 13% to 4.7 million units, while commercial vehicles grew 11.7% to 1.06 million units, returning above the one-million mark for the first time since FY19.

Tractor sales were a standout, jumping 18.9% to cross 1 million units for the first time.

Three-wheelers rose 11.7% to 13,63,412 units, marking a third straight annual record, while construction equipment was the only segment to decline, falling 11.7% to 71,227 units..

FADA President C S Vigneshwar said the year unfolded in two distinct phases, with muted demand in the April-August period followed by a sharp recovery from September after the rollout of GST 2.0, which lowered effective taxes on mass-market vehicles.

“From September onwards, we witnessed a clear inflection: the festive convergence of Navratri and Diwali in October delivered an all-time record monthly retail of over 40 lakh units, and the momentum carried through the remainder of the year,” Vigneshwar said.

“January, February, and March 2026 each registered strong double-digit YoY growth, validating that the upshift was not merely festive but structural,” he added.

March auto sales data

March sales capped the year on a strong note, rising 25.3% year-on-year to 2.69 million units, the highest ever for the month. Two-wheelers led the growth with a 28.7% jump, while passenger vehicles rose 21.5% and commercial vehicles increased 15.1%.

Two-wheeler sales in March grew 28.68% to 19,51,006 units, while passenger vehicles rose 21.48% to 4,40,144 units.

Commercial vehicles increased 15.12% to 1,02,536 units, three-wheelers by 10.52% to 1,09,777 units, and tractors by 10.87% to 82,080 units.

Construction equipment declined 16.17% to 6,906 units.

Rural demand outpaced urban markets during March, with rural retail growing 26.49% compared to 23.82% in urban areas.

Near-term outlook

FADA said the near-term outlook remains “constructively cautious”. About 50.56% of dealers expect growth in April, although factors such as geopolitical tensions in West Asia, potential fuel price increases and supply disruptions may weigh on sentiment.

For the April–June quarter, nearly half of the dealers expect growth, while 74.7% remain optimistic about FY2026-27, projecting expansion in the range of 3–7%.

“The near-term risk lies in the speed and severity with which the West Asia situation evolves and transmits to fuel prices, supply chains, and broader consumer sentiment,” Vigneshwar added.