Landmark year for Indian auto retail in FY 2025-26, says FADA

Talking about this record growth, FADA President C S Vigneshwar said: “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. What makes this year particularly significant is that the growth was structurally sound, underpinned by improving affordability, widening mobility demand across urban and rural India, and a diversifying powertrain mix.”

The year, he said, was not linear. The first five months — April through August — were a period of measured momentum, with monthly growth ranging between 2% and 5% as the market navigated residual caution from the previous year’s sluggish inventory cycle, selective financing constraints, and consumer wait-and-watch behaviour in anticipation of policy clarity. During this phase, enquiries remained tentative, conversions stayed uneven, and the dealer community exercised understandable restraint.

The turning point arrived in September with the implementation of GST 2.0. The rate rationalisation — which meaningfully reduced the effective tax burden on mass-segment two-wheelers, small cars, three-wheelers, and select commercial categories — improved real affordability at a time when the consumer was already positioned to respond. 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. January, February, and March 2026 each registered strong double-digit YoY growth, validating that the upshift was not merely festive but structural.

All India Vehicle Retail Data for FY’26

Source: FADA Research

Disclaimer:

The above numbers do not have figures from TS.

Vehicle Retail Data has been collated as on 02.04.26 in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,463 out of 1,466 RTOs.

Others include OEMs accounting less than 0.1% Market Share.

Two-Wheelers reclaimed their pre-COVID peak, retailing over 2.14 crore units and growing 13.40% — a recovery that had been long awaited and was finally unlocked by the combination of GST-led affordability, improved rural cash flows, and a broadening product portfolio that catered to both entry-level and aspirational segments.

Passenger Vehicles crossed the 47-lakh mark for the first time, growing 13.00%, supported by a rich new-model pipeline, steady urbanisation, and the sustained shift towards SUVs and alternative powertrains. Tractors were the year’s standout performer, crossing 10 lakh retail units for the first time in history at 18.95% growth — a direct reflection of an excellent monsoon, strong rabi sowing, and improving farm economics.

Mar’26 Auto Retail

Vigneshwar added that , “March 2026 was an emphatic close to a landmark financial year. The industry retailed 26,92,449 vehicles — the highest-ever March in FADA’s records — posting a 25.28% YoY growth that was both broad-based and meaningful across categories. More than the headline number, what stands out is the quality of this close: it was driven by genuine retail pull rather than channel push, backed by enquiry conversion, healthy walk-in trends, and sustained consumer engagement right through the month.”

Two-Wheelers led the charge with 19,51,006 units retailed (+28.68% YoY), the second-highest March ever recorded. Demand was broad-based across both urban and rural markets — urban grew 28.84% and rural 28.57% — reflecting a convergence that is increasingly characteristic of the post-GST 2.0 phase. The EV share in 2W surged to 9.79%, the highest monthly reading yet, suggesting that the electric transition in this segment is approaching a critical mass, particularly in urban and semi-urban markets where total cost of ownership is becoming the decisive factor.

Passenger Vehicles posted a record March at 4,40,144 units (+21.48% YoY), with rural PV growth once again outpacing urban at 26.48% versus 18.46%. The channel was in a markedly healthier position than the same month last year — inventory at approximately 28 days compared to over 50 days a year ago, and aged stock well within manageable levels. The fuel mix continued to evolve: CNG share in PVs rose to 23.76%, EV share improved to 5.11%, and petrol share moderated further — a structural shift that reflects both supply-side product expansion and demand-side consumer preference.