Automobile retail sales up 13.30% at 2,96,71,064 units in FY26: FADA

New Delhi: Retail sales of vehicles across categories in India in FY26 grew by 13.30 per cent at a record 2,96,71,064 units as compared to 2,61,87,255 units in the previous fiscal, with GST 2.0 helping overcome a subdued start to the year, Federation of Automobile Dealers Associations said on Monday.

Passenger vehicle (PV) retail sales rose to 47,05,056 units in FY26, up 13 per cent from 41,63,927 units in FY25, the Federation of Automobile Dealers Associations (FADA) said in a statement, adding that it is cautiously optimistic but watchful of the possible impact of West Asia war on vehicles demand in India going forward.

Similarly, two-wheeler sales also grew by 13.40 per cent at 2,14,20,386 in FY26 as compared to 1,88,89,595 units in FY25. In FY26, three-wheeler retail sales stood at 13,63,412 units, up 11.68 per cent from 12,20,834 units in FY25, FADA said.

Commercial vehicles retail also witnessed a growth of 11.74 per cent at 10,60,906 units in FY26 as against 9,49,406 units in FY25, it added. Commenting on the industry performance, FADA President C S Vigneshwar said,”2025-26 has been a landmark year for Indian auto retail delivering an all-time high of 2,96,71,064 units with a broad-based 13.30 per cent YoY growth that saw five of six vehicle categories set new annual records.”

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, he added. “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,” Vigneshwar noted.

He, however, pointed out that FY26 growth was not linear as the first five months, April through August, were a period of measured momentum, with monthly growth ranging between 2-5 per cent 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. “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,” Vigneshwar said.

From September onwards, 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, he said.

On the outlook, FADA said, “The key variable will be the trajectory of the West Asia situation and its pass-through to fuel prices, supply availability, and overall consumer confidence.”