Automobile retail sales in India rose 12.94 per cent year-on-year to a record 26,11,317 units in April, compared with 23,12,221 units in the same month last year, marking a strong start to FY27, according to the Federation of Automobile Dealers Associations (FADA).
The growth was supported by multiple tailwinds, including improved affordability following GST revisions, the RBI’s accommodative rate stance, healthy rural cash flows after a strong rabi harvest, and an extended marriage season.
Passenger vehicle (PV) retail sales touched an all-time high of 4,07,355 units, up 12.21 per cent from a year ago. Two-wheelers posted their best-ever monthly performance at 19,16,258 units, growing 13.01 per cent. Three-wheeler sales rose 7.19 per cent to 1,06,908 units, while commercial vehicle (CV) sales climbed 15.02 per cent to a record 99,339 units.
FADA noted that five of the six vehicle categories recorded their highest-ever April sales, indicating that the demand momentum seen in the second half of FY26 has carried into the new fiscal.
Rural demand continued to outpace urban markets across segments. In PVs, rural growth stood at 20.4 per cent compared with 7.11 per cent in urban areas, signalling a structural broadening of personal mobility into Tier-3 and rural regions. This trend is being driven by a revival in small cars, sustained SUV demand, and an expanding alternative powertrain mix. CNG vehicles accounted for 22.62 per cent of PV sales, while EV penetration improved to 5.77 per cent.
FADA said PV inventory levels rose marginally to 28–30 days, slightly above March levels but still within a healthy range, and advised OEMs to maintain disciplined dispatches to keep inventory aligned with its recommended 21-day benchmark.
Explaining the trend, FADA president Sai Giridhar said the growth momentum is not a one-off. “We are witnessing this month after month since the GST changes in September 2025. The best part is that growth is broad-based and expanding into rural markets,” he said. “Across segments, rural growth is consistently outpacing urban, whether in two-wheelers, CVs or PVs.”
He added that while inventories are above the recommended level, “28–30 days is still healthy… we have seen levels as high as 75 days earlier.”
On alternative fuels, Giridhar said the transition remains gradual. “EV share has improved from around 3.7 per cent last year, but adoption is still evolving. The long-term shift will be towards alternative fuels and next-generation powertrains,” he said, adding that CNG continues to gain traction due to its cost advantage.
Looking ahead, dealer sentiment remains steady, with 50.9 per cent expecting growth in the April–June quarter. Two-wheelers are likely to benefit from rural demand and pre-Kharif cash flows, while PV sales may moderate after May before strengthening ahead of the festive season.
FADA cautioned that heatwaves, geopolitical tensions in West Asia affecting fuel prices, and liquidity conditions in the CV segment remain key risks. “If fuel prices rise sharply, it will directly impact retail demand, especially in PVs and CVs,” Giridhar said, adding that while supply disruptions have been limited so far, global uncertainties remain a concern.