Despite evolving headwinds such as an above-normal heatwave, fuel-price pressure and the evolving West Asia situation, automobile retail sales registered its best ever May sales across 3-wheeler, passenger vehicle (PV), tractors and overall registrations. As per Federation of Automobile Dealers Associations (FADA) data released on Monday, total automobile retail sales grew by 9.55% year-on-year to a record 25,31,067 units in May 2026.
Passenger vehicles (PV) retail sales were at a record 4,02,591 units last month as compared to 3,26,656 units in May 2025, a growth of 23.25% while two-wheelers also clocked best-ever monthly numbers at 18,44,947 units in May this year as compared to 17,15,581 units in the same month a year ago, a growth of 7.54%.
Dealers reported a visible rise in enquiries for fuel-efficient and alternative-powertrain options, reflected in the two-wheeler EV share climbing to 9.25% from 6.11% a year ago. EV share in the passenger vehicle segment also improved to 6.63%
“PV retails were the clear standout at 4,02,591 units, a robust 23.25% YoY expansion, with the Bharat-led character of the recovery firmly intact — Rural PV grew 30.35% YoY against Urban at 18.80%. Dealers pointed to a small-car revival co-existing with a sustained SUV mix, healthy booking pipelines and refreshed product launches, alongside a richer alternative-powertrain mix in which CNG share rose to 23.34% and EV share improved to 6.63%. Overall alternative fuel share rose to 38%+ in May,” said FADA President C S Vigneshwar.
On 2W sales, Vigneshwar said that dealers attributed the steady commuter and rural participation to marriage-season buying and continued affordability under the GST 2.0 framework, even as heatwave conditions dampened showroom walk-ins in several markets and selective model-wise supply gaps tempered the momentum.
Looking ahead to June 2026, FADA said that dealer sentiment is measured, with 50.52% of dealers expecting growth, 39.90% anticipating a flat market and only 9.59% foreseeing a decline. With the south-west monsoon having set in over Kerala on 4th June and beginning its northward advance, demand expectations are anchored in the progress of the monsoon, early Kharif sowing preparation and the tail of the marriage season, supported by a stable financing environment after the Reserve Bank of India held the repo rate at 5.25% in its June review, it added.
“Overall, the next three months appears to be Cautiously Optimistic — with a tad below normal monsoon, the firm 7.7% FY26 GDP print and broad policy continuity providing a supportive backdrop, the industry looks set to move from a seasonally soft patch towards a firmer second-quarter footing,” said FADA.
