NEW DELHI: On the back of a sharp surge in demand after the GST rate reduction in late September 2025, retail automobile sales stood at almost 3 crore units in the financial year 2026, a new high for the industry.
As per data shared by Federation of Automobile Dealers Associations (FADA), Indian auto retail sales peaked to an all-time high of 2,96,71,064 units in FY26 with a broad-based 13.30% year-on-year growth that saw five of six vehicle categories set new annual records.
"This is not just a number. It represents the industry approaching the 3-crore mark, a milestone that would have seemed distant just two years ago," said FADA President CS Vigneshwar.
He added that the year was not linear as the first five months—April through August—were a period of measured momentum, with monthly growth ranging between 2% and 5%. The turning point arrived in September with the implementation of GST 2.0 when rates were slashed between 7% and 10% for different categories.
"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. January, February, and March 2026 each registered strong double-digit YoY growth, validating that the upshift was not merely festive but structural," said Vigneshwar.
Category-wise, two-wheelers reclaimed their pre-COVID peak, retailing over 2.14 crore units and growing 13.40%. The recovery is attributed to GST-led affordability and improved rural cash flows. Passenger Vehicles crossed the 47-lakh mark for the first time, growing 13 %, supported by new-model pipeline, steady urbanisation, and the sustained shift towards SUVs and alternative powertrains.
Electric vehicle penetration improved in every major category—2W EV rose to 6.54% on total sales, PV EV rose to 4.25%, and CV EV nearly doubled to 1.83%. CNG also strengthened its foothold in PVs at 21.98% and in CVs at 11.79%.
Tractor sales crossed 10 lakh retail units for the first time in history at 18.95% growth over an excellent monsoon, strong rabi sowing and improving farm economics.
Commercial Vehicles (CV) recorded their best-ever figures and went above the 10-lakh mark for the first time at 11.74% growth, led by infrastructure-driven freight demand.
Three-wheelers set their third consecutive annual record at 11.68% growth, with the EV transition now accounting for over 60% of the segment's retail.
Construction Equipment was the sole exception, declining 11.70% as project-level delays and a high base weighed on volumes.
FADA said that demand over the next three months will be shaped by several cross-currents. On the positive side, the marriage season will support retail in the northern belt through May, new model launches—particularly in the PV and 2W segments—will sustain enquiry pipelines, and the residual benefit of GST 2.0-led affordability should continue to support conversions.