The Federation of Automotive dealers associations (FADA) is expecting passenger vehicle sales to grow in the range of 15-20 percent in the next three months, thanks to the festive season, good inventory across dealerships among other factors. Amar Jatin Seth, who took over as FADA, Vice President recently said, “Using August 2026 sales figures as base, we are expecting a 15-20% growth in the next 3 months, mainly due to the festive season and good inventory across dealerships. Half yearly financial closure in September will also help.” New launches, bookings and rural demand may support festive retail, but elevated PV inventory, a high base and weaker-than-expected demand remain risks, he added.
Passenger vehicle (PV) retail sales rose 16.14% year on year to 4,02,398 units in August, the segment’s best-ever August and its first time crossing the four-lakh mark. However, sales were 3.40% lower than July’s 4,16,555 units. Rural PV retail grew 24.99% YoY, compared with 10.93% in urban markets, taking rural share to 39.9%.
“This is not temporary and mainly a structural change. Apart from traditional income, there are more avenues open to people in rural areas as well, the spending is high there now and there are government schemes as well that are supporting incomes for rural buyers,” said Amar Jatin Seth, vice-president, FADA.
The more significant shift was in fuel mix. CNG/LPG, hybrids and EVs together accounted for 41.95% of PV retail, overtaking petrol/ethanol at 40.85% for the first time. CNG/LPG accounted for 25.28%, hybrids 9.04% and EVs 7.63%, while diesel stood at 17.21%.
“This change in fuel mix is mainly due to geopolitical issues, and it is expected to continue. CNG percentage is also very high, making it the large contributor, more than diesel. Acceptability of CNG will continue to grow and will push the mix. OEMs are also pushing for more CNG models,” Seth said.
He added that the full impact of GST 2.0, which came in September, would be more evident from October. “We will not see this high base growth going forward. For the rest of the year, if high single or low double digit will be good enough. The month historically has been good. So standalone, the month has been very good.”
Two-wheeler retail rose 19.69% YoY to 17,14,610 units, its best-ever August, while EV penetration increased to 10.68% from 7.66% a year earlier. Seth attributed the growth to organic demand, fading stigma and improving charging infrastructure.
Commercial vehicle retail increased 14.45% YoY to 90,769 units, supported by infrastructure execution, mining, e-commerce logistics and financing availability.
FADA said PV inventory rose to 38-40 days, above its recommended 21-day benchmark. “FADA is not comfortable with this high inventory of up to 40 days. Dealers have enough stock for the upcoming festive season, hence waiting periods will be less and inventories should gradually come down. After the festive season we could be around 25-day inventory,” Seth said.
He said discounts may not change significantly as dealers offer them from their margins, with OEMs deciding how to push sales via various schemes. On tractors, Seth said the monsoon deficit would affect demand, although the festive season could provide some support.
