THEBUSINESSBYTES BUREAU

BHUBANESWAR, FEBRUARY 10, 2026

India’s automobile retail market began calendar year 2026 on a strong footing, clocking robust, broad-based growth across most segments, according to vehicle retail data released by the Federation of Automobile Dealers Associations (FADA) for January 2026.

Overall vehicle retail stood at 27,22,558 units in January, marking a sharp 17.61 per cent year-on-year growth.

FADA President C S Vigneshwar said, “The momentum reflects sustained post-GST tailwinds, healthy rural cashflows supported by harvest and wedding-related spending, and steady demand visibility across both personal mobility and freight movement. While two-wheelers, passenger vehicles, commercial vehicles, tractors and three-wheelers all reported solid expansion, construction equipment continued to face pressure, declining 21.09 per cent year-on-year due to a high base and segment-specific recalibration.”

Two-wheelers emerged as the clear growth engine, retailing 18,52,870 units, up 20.82 per cent year-on-year. Demand remained firmly anchored in rural India, which accounted for around 56 per cent of volumes, though urban markets also showed a notable revival. Rural two-wheeler sales grew 19.77 per cent, supported by festivals, marriage-season footfalls and improved affordability, while urban volumes rose a sharper 22.19 per cent, signalling a return of non-festive demand. Dealers highlighted strong enquiry momentum, driven by sharper customer engagement, faster digital follow-ups and a shift towards mid-powered and higher-value motorcycles, even as selective supply constraints and aggressive discounting influenced model-wise performance.

Commercial vehicle retail reached 1,07,486 units, registering a healthy 15.07 per cent growth. The improvement was visible across tonnage segments, with light commercial vehicles growing 14.94 per cent and heavy commercial vehicles rising 14.61 per cent. According to FADA, stronger goods movement, infrastructure activity and renewed confidence among single-owner operators supported replacement-led buying, with both urban and rural markets participating in the uptrend.

Passenger vehicles recorded retail sales of 5,13,475 units, up 7.22 per cent year-on-year. While the segment remained urban-led, rural markets are increasingly driving incremental growth. Rural PV sales surged 14.43 per cent, significantly outpacing urban growth of 2.75 per cent, underlining the structural expansion of demand beyond metros. Preference for SUVs and compact SUVs, revival in entry-level cars, better product availability and continued schemes aided momentum. Importantly, PV inventory levels softened to around 32–34 days, indicating healthier channel discipline and improved working-capital efficiency.

Looking ahead, dealer sentiment for February 2026 remains constructive, with over 72 per cent of dealers expecting growth. Supportive macros, a growth-oriented Union Budget with an infrastructure and agriculture thrust, wedding and festival tailwinds, and RBI rate stability are expected to underpin demand. Over the next three months, optimism remains strong, as nearly 80 per cent of dealers anticipate growth, with FADA maintaining a positive outlook for the near term despite shorter months, high base effects and localised supply constraints.