Auto retail sales jump 26% in February

Auto retail sales in India recorded strong growth in February, with total vehicle registrations rising 25.6% year-on-year to 24.09 lakh units, according to data released by the Federation of Automobile Dealers Associations (FADA). Sai Girdhar, vice-president of FADA, said the recovery in rural markets has been a key driver of the current momentum. “The overall economy is growing and GST continues to be a strong driving force for demand. Rural markets in particular have shown a strong comeback, with passenger vehicle sales growing 34% year-on-year compared to about 21% growth in urban markets,” he said.

Passenger vehicle (PV) retail sales rose 26.1% year-on-year to 3,94,768 units in February 2026, marking the highest-ever February sales volume for the segment despite the month having fewer trading days. Maruti Suzuki remained the dominant player, retailing 1,54,095 units and commanding a 39.03% market share. Tata Motors followed with 56,447 units (14.30%), while Mahindra & Mahindra sold 53,281 units, capturing a 13.50% share. Hyundai Motor India retailed 45,615 units (11.55%), while Toyota Kirloskar Motor and Kia India accounted for 6.69% and 6.34% of the market respectively. SUVs and utility vehicles continued to dominate volumes, while improved rural sentiment also boosted demand for entry-level cars, particularly among first-time buyers.

Petrol and ethanol powered models remained the most common fuel choice, accounting for 46.08% of PV sales. CNG and LPG vehicles increased their share to 23.45%, while diesel accounted for 18.80%. Hybrid vehicles held an 8.19% share, while electric vehicles made up 3.48% of PV retail.

Girdhar noted that automakers have helped sustain demand by keeping price hikes in check. “OEMs have been cautious with price revisions, and the net transaction price has largely remained stable, which has helped maintain demand momentum,” he said. “The RBI reduced repo rates multiple times last year and auto loan rates remain among the lowest we have seen.”

Dealer inventory levels have also improved significantly. “Inventory levels, which were earlier around 70 days, have now come down to about 27–30 days. Growth is now coming even with lean inventory levels, and we expect it to gradually move closer to FADA’s benchmark of 21 days,” Girdhar said.

Commercial vehicle (CV) retail sales rose 28.9% year-on-year to 1,00,820 units, marking the highest February retail volume for the segment. Growth was supported by improved freight movement, strong e-commerce activity and infrastructure-led demand.

Three-wheeler retail sales grew 24.4% year-on-year to 1,17,130 units, the best February performance for the segment. Passenger carriers led the growth, with 60,572 units sold, up 36% year-on-year. Goods carriers also recorded strong growth at 14,335 units, while e-rickshaw volumes continued to expand steadily.

Tractor retail sales recorded the fastest growth among vehicle categories, rising to 89,418 units in February 2026 from 65,579 units a year earlier. Rural markets continued to dominate the segment, accounting for over 82% of total tractor retail. Rural tractor sales grew 37.7% year-on-year, outpacing urban growth of 30.6%. Construction equipment was the only segment to record a marginal decline, with retail sales falling 1.2% year-on-year to 6,721 units.

Looking ahead, the industry expects March sales to remain strong, supported by festival demand and financial year-end purchases. 

However, geopolitical tensions remain a potential risk to consumer sentiment. “About 67% of dealers expect growth over the next three months, although the momentum may moderate slightly,” Girdhar said.