- Mahadharani Vijay

Vehicle registrations rose 13.30 percent in FY26, driven by two-wheelers, passenger vehicles, tractors, commercial vehicles, and EV-powered three-wheelers.

India’s Auto retail sales sector posted its highest-ever annual sales in FY26, with total vehicle registrations rising to 2,96,71,064 units, up 13.30 percent year on year, according to information released by the Federation of Automobile Dealers Associations (FADA) on Monday. The performance of Auto retail sales highlighted widespread demand recovery across important vehicle categories and brought the domestic auto market close to the noteworthy 3-crore annual sales milestone.

FADA President C.S. Vigneshwar claims that structural causes such as increased affordability, growing urban and rural mobility demands, and a more varied powertrain mix were the main drivers of the expansion. With almost 2.14 crore units sold in FY26 and a growth of 13.40 percent, two-wheelers led the total recovery. Also, the segment surpassed its pre-COVID peak due to increased affordability, better rural cash flows, and a wider selection of models.

For the first time, the number of passenger cars surpassed 47 lakh, increasing by 13% during the fiscal year. New model releases, increased urbanization, and consumers' continued preference for SUVs and alternative fuel cars were the primary drivers of the growth. Tractors were the strongest performing category overall, reaching 10 lakh units for the first time and growing by 18.95 percent. A favorable monsoon, high rabi output, and rising farm revenues were cited as the reasons for the increase.

Due to infrastructure-based demand and development in the medium commercial vehicle market, commercial vehicles also set a record high, topping 10 lakh units with 11.74 percent growth. Three-wheelers, on the other hand, continued their upward trend, growing by 11.68 percent and setting an annual sales record for the third year in a row. More than 60 percent of these vehicles were electric.

According to FADA, the sector's impetus was strengthened by increased affordability, which was made possible by the rationalization of the GST rate on mass-market vehicles. The association stated that although growth may slow down following a successful year-end, the near-term outlook is still steady.

Thus, Business Fortune is of the view that India’s auto retail sector remains on a strong growth path.

About the Author

Mahadharani Vijay is a writer specializing in Lifestyle, Electric and Concept Cars, Science and Technology, and Markets, with a focus on transforming emerging trends and innovations into clear, engaging, and accessible stories for professionals and broader audiences.