India’s vehicle retail sales jump 26% in Feb, best-ever for the month, dealers say

India’s vehicle retail sales rose 25.6% year-on-year in February to a record 24.09 lakh units for the month, helped by stronger rural demand, improved affordability following GST changes and healthy economic activity, auto dealers’ body said on Thursday.

Data released by the Federation of Automobile Dealers Associations (FADA) showed that sales growth was broad-based across most segments, including two-wheelers, passenger vehicles and commercial vehicles.

“Feb’26 has turned out to be a landmark month for the Indian auto retail sector, further strengthening the positive momentum seen after the GST 2.0 announcement,” FADA President C S Vigneshwar said.

Despite being a shorter month, the industry delivered an exceptional performance with total vehicle retails touching 24.09 lakh units, marking a 25.62% year-on-year growth and surpassing the previous best February recorded in 2024, he added.

Two-wheeler retail sales, the largest segment of the market, rose 25.02% year-on-year to 17,00,505 units in February.

Commercial vehicle sales increased 28.9% to 100,820 units and three-wheeler sales rose 24.4% to 117,130 units.

Tractor sales posted the fastest growth, rising 36.4% year-on-year to 89,418 units, reflecting improving rural demand and strong agricultural incomes, according to FADA.

The performance indicates that policy-led confidence in the market, particularly after the announcement of “GST 2.0”, is translating into sustained demand across vehicle segments, Vigneshwar said.

Passenger vehicle retail sales grew 26.12% year-on-year to 3,94,768 units during the month.

“The sharper rural growth is particularly encouraging as it is supporting the sale of small cars, even as SUVs and utility vehicles continue to drive overall volumes,” Vigneshwar noted.

He also highlighted improving supply discipline in the segment, saying passenger vehicle inventory levels have reduced by about five days and now stand at 27–29 days.

“This is an extremely healthy sign. We appreciate PV OEMs for moving inventory closer to FADA’s recommended 21-day level, reflecting improved supply discipline and stronger alignment between wholesale dispatches and retail demand,” he said.

Among other segments, three-wheeler sales increased 24.39% to 1,17,130 units, while tractor sales recorded the fastest growth at 36.35% to 89,418 units. Construction equipment was the only category to see a marginal decline, slipping 1.22% year-on-year to 6,721 units.

Looking ahead, dealers remain largely optimistic about March sales, with 75.51% expecting growth, 19.90% anticipating a stable market and only 4.59% foreseeing a decline.

“Demand is expected to be supported by the confluence of multiple festivals such as Navratri, Ramzan, Ugadi, Gudi Padwa and Eid, along with the financial year-end buying cycle, which traditionally accelerates vehicle purchases across segments,” FADA said.

However, dealers expect growth to moderate in the coming months as the market transitions from a sharp rebound phase after GST changes to a more stable growth trajectory.