Indian auto retail sales experienced a remarkable 26% surge in February, fueled by GST benefits, strong rural demand, and new model introductions, signalling robust growth across vehicle segments.
Photograph: Babu/Reuters
Key Points
- Indian auto retail sales jumped 26% year-on-year in February, indicating strong market confidence and improved affordability.
- Five out of six auto categories, including two-wheelers and passenger vehicles, achieved record February retail volumes.
- Rural markets experienced stronger growth (34%) than urban markets (21%), boosting sales of smaller cars.
- Improved rural liquidity, attractive marketing schemes, and new product launches contributed to increased two-wheeler sales.
- Commercial vehicle sales benefited from improved freight availability, e-commerce activity, and infrastructure demand.
Domestic automobile retail sales surged 26 per cent year-on-year in February, extending the momentum seen after GST 2.0, with improved affordability and market confidence translating into broad-based growth across segments, dealers’ body FADA said on Thursday.
The overall retail sales last month rose to 24,09,362 units as compared with 19,17,934 units in February 2025, registering an increase of 25.62 per cent.
“The growth was broad-based across almost all segments…Five out of six categories — two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors — registered their highest-ever February retail volumes, clearly highlighting the strength of underlying demand in the market,” FADA president C S Vigneshwar said in a statement.
On a YoY basis, two-wheelers grew by 25 per cent, three-wheelers by 24 per cent, passenger vehicles by 26 per cent, and commercial vehicles by 29 per cent, reflecting healthy demand across both personal mobility as well as economic activity-driven segments, he added.
Passenger vehicle retails rose to 394,768 units last month as compared with 313,015 units in the year ago-period.
Regional Sales Performance
“The momentum remained broad-based with urban markets growing 21 per cent YoY while rural markets surged 34 per cent YoY, indicating a strong continued demand beyond metros,” Vigneshwar said.
The sharper rural growth is particularly encouraging as it is supporting the sale of small cars, even as SUVs and utility vehicles continue to drive overall volumes, he added.
Improved affordability following GST rationalisation, the marriage season and healthy booking pipelines supported by new model introductions also aided demand during the month, he said.
Two-Wheeler and Commercial Vehicle Sales
Two-wheeler retails rose to 17,00,505 units last month as compared with 13,60,155 units in February last month.
Dealers attributed this performance to improved rural liquidity following good crop outcomes, attractive marketing schemes and better affordability post GST revisions, while the marriage season and new product introductions also supported enquiries, the industry body said.
In the commercial vehicle segment, dealers across regions reported improved freight availability, steady e-commerce activity and infrastructure-linked demand supporting fleet additions.
The positive sentiment following GST 2.0 also helped improve secondary demand and bulk purchases.
However, some pockets saw supply constraints for certain models, though the overall pipeline of bookings and market movement remained encouraging, FADA (Federation of Automobile Dealers Associations) stated.
Commercial vehicle sales rose to 1,00,820 units in February as against 78,219 units in the same month last year.
Three-wheeler and tractor retail sales stood at 1,17,130 and 89,418 units, respectively, in February.
Future Outlook
FADA noted that the business outlook for March appears cautiously optimistic, with festive demand and year-end dynamics expected to keep retail momentum intact.
“Overall, the next three months still appear cautiously optimistic – the growth momentum is intact, but compared to the sharper optimism seen earlier, the survey now indicates that the industry may gradually move from a phase of strong rebound to a phase of more stable and calibrated growth,” it added.
