Automobile retail sales rose nearly 18 per cent year-on-year to over 27 lakh units in January, led by continued post-GST momentum, healthy rural cash flows on the back of harvest and weddings, and sustained demand visibility across freight, dealer's body FADA said on Tuesday.
Overall retail sales last month grew to 27,22,558 units, up 17.61 per cent, as against 23,14,940 units in January 2025.
Passenger vehicle retails stood at 5,13,475 units last month, a growth of 7 per cent, as against 4,78,915 units in the year-ago period.
3 February 2026
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"The growth story is increasingly being written in non-metro India -- Rural PV grew by 14.43 per cent YoY, significantly ahead of Urban at 2.75 per cent YoY.
"This reinforces the structural expansion of PV demand beyond the top cities, aided by a strong SUV/compact-SUV preference, revival of entry-level cars, product availability and continued schemes," FADA President C S Vigneshwar said in a statement.
Two-wheeler retail sales grew 21 per cent year-on-year to 18,52,870 units in January.
"While rural volumes stayed robust, supported by Pongal/Makar Sankranti, marriage-season footfalls and better affordability, we are also seeing a clear revival in urban markets, a healthy signal of demand normalisation beyond festive season buying," Vigneshwar noted.
Three-wheeler and commercial vehicle retails witnessed sales growth of 19 and 15 per cent respectively last month.
Tractor registrations rose 23 per cent year-on-year to 1,14,759 units in January.
On the business outlook for the next three months, FADA stated that dealer confidence remains decisively constructive, with 79.70 per cent of respondents expecting growth and only 1.88 per cent indicating de-growth.
The near-term macro setup is supportive: a growth-oriented Budget with a visible infra and agri thrust, policy continuity post GST 2.0, and rate stability after 2025's easing are collectively improving affordability, financing comfort and purchase intent, it stated.
On-ground feedback also points to stronger enquiry pipelines, tighter follow-ups, and local marketing/activation intensity translating into higher conversion potential -- while the key watchouts remain election-related disruptions in select states, the usual seasonality/short-month effects, and model/variant availability in specific pockets, FADA noted.
Category-wise, two-wheelers are expected to stay on a positive slope, led by conversion of pending enquiries, continued wedding/festival tailwinds improving rural liquidity from crops, and rising traction in scooters, commuter motorcycles and EV acceptance -- though growth will be capped where OEM supply/variant constraints persist and where election codes impact footfalls, it said.
Commercial vehicle sales outlook remains favourable through the quarter as dealers report an upcycle supported by infra project gearing, improving freight environment, and Q4 replacement/addition decisions, with applications linked to construction/ logistics and goods movement expected to perform better than discretionary categories, it said.
Passenger vehicles should see a strong February-March run on the back of booking pipeline strength, new model/variant excitement, and financial year-end buying, it added.
April registrations could normalise as festive intensity fades and base effects may play out unevenly across brands and regions, FADA stated.
Overall, the next three months remain optimistic, it added.
