India’s automobile retail market delivered its strongest February performance on record in 2026, with total vehicle registrations rising 25.62 per cent year-on-year to 24,09,362 units, according to data released by the Federation of Automobile Dealers Associations (FADA) on Thursday.
The growth was broad-based across segments, with two-wheelers, passenger vehicles, commercial vehicles, three-wheelers and tractors all recording strong gains despite the shorter month.
Performance across segments
Passenger vehicle (PV) registrations increased 26.12 per cent to 3,94,768 units, while two-wheeler retail sales climbed 25.02 per cent year-on-year to 17,00,505 units.
Retail sales of commercial vehicles (CVs) rose 28.89 per cent to 1,00,820 units, while the three-wheeler segment expanded 24.39 per cent to 1,17,130 units.
The tractor segment emerged as the fastest-growing category, posting a 36.35 per cent jump to 89,418 units, supported by strong rural demand and continued mechanisation in agriculture. In contrast, construction equipment sales declined marginally by 1.22 per cent to 6,721 units.
FADA noted that February 2026 marked the best-ever February for overall auto retail sales, with record performances across several segments including two-wheelers, passenger vehicles, commercial vehicles, three-wheelers and tractors.
According to FADA President C S Vigneshwar, the strong retail performance reflects improving affordability and rising consumer confidence following policy changes such as the implementation of GST 2.0, along with sustained demand momentum across both urban and rural markets.
Rural markets take the lead
Segment-wise trends highlighted stronger growth in rural markets for passenger vehicles, which expanded 34.21 per cent year-on-year, compared with 21.12 per cent growth in urban areas. The SUV segment continued to dominate PV demand, while improving rural conditions also supported entry-level car sales.
In the two-wheeler segment, urban sales grew 28.96 per cent year-on-year, while rural markets expanded 22.16 per cent, indicating balanced demand across regions.
Meanwhile, commercial vehicle sales remained supported by higher freight movement, growing e-commerce activity, and infrastructure-led demand across the country.
Outlook ahead
FADA also reported an improvement in passenger vehicle inventory levels, which declined to around 27–29 days, compared with higher levels in previous months. This is closer to the industry body’s recommended benchmark of 21 days, suggesting better alignment between wholesale dispatches and retail demand.
Looking ahead, dealer sentiment remains broadly positive. Around 75.51 per cent of dealers expect sales growth in March, supported by financial year-end purchases and festival demand, while only 4.59 per cent anticipate a decline.
However, the outlook for near-term growth has moderated slightly. About 67.35 per cent of dealers now expect business expansion, lower than the previous survey reading, indicating expectations are becoming more measured.
FADA said the shift suggests the market may be transitioning from an earlier sharp rebound phase to a more stable and sustainable growth trajectory. Despite the moderation, overall sentiment remains cautiously optimistic, with dealers continuing to expect steady demand rather than a rapid surge in sales.
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