Auto retail sales hit record high in FY26, near 3-crore mark: FADA

India’s automobile retail sector recorded its highest-ever annual sales in FY26, with total registrations reaching 2,96,71,064 units, marking a 13.30 per cent year-on-year growth, according to data released by the Federation of Automobile Dealers Associations (FADA) on Monday.

The figures bring the domestic auto industry close to the 3-crore annual sales milestone, reflecting strong and broad-based demand across segments.

FADA President C.S Vigneshwar said the growth was structurally driven by improving affordability, rising mobility demand across urban and rural markets, and a diversified powertrain mix.

Among segments, two-wheelers led the recovery, surpassing their pre-COVID peak with sales of over 2.14 crore units, registering a 13.40 per cent growth. The rebound was supported by improved rural cash flows, better affordability and a wider product range.

Passenger vehicles crossed the 47-lakh mark for the first time, growing 13 per cent, driven by new model launches, increasing urbanisation and rising preference for SUVs and alternative fuel vehicles.

Tractors emerged as the standout performer, crossing 10 lakh units for the first time with a growth of 18.95 per cent, aided by a favourable monsoon, strong rabi output and improved farm incomes.

Commercial vehicles also recorded their highest-ever sales, crossing the 10-lakh mark with 11.74 per cent growth, supported by infrastructure-led demand and strong performance in the medium commercial vehicle segment.

Three-wheelers continued their upward trend, posting an 11.68 per cent growth and setting a third consecutive annual record, with electric vehicles accounting for over 60 per cent of the segment.

However, the construction equipment segment declined by 11.70 per cent due to project delays and a high base effect.

FADA attributed the growth momentum to improved affordability following GST rate rationalisation, which reduced the effective tax burden on mass-segment vehicles and supported demand recovery.

On the demand side, rural markets continued to close the gap with urban centres. Rural sales grew by 13.05 per cent, compared to 13.62 per cent growth in urban markets. Notably, rural demand for passenger vehicles outpaced urban growth.

Looking ahead, the near-term outlook remains stable, though growth may moderate after a strong year-end. According to FADA, over 50 per cent of dealers expect growth in April, while around 40 per cent anticipate stable performance.