January auto retail sales rise 19% to cross 27 lakh units led by two wheeler sales

The overall vehicle retail sales in January 2026 grew 18.61% Year on Year (YoY) to 27,22,558 units, led by growth in two wheelers (2W), commercial vehicles (CV) and three wheelers (3W) sales according to data released by The Federation of Automobile Dealers Associations (FADA) on Tuesday (February 10, 2026).

FADA said the near team outlook is positive.

The growth was powered by continued post-GST momentum, healthy rural cashflows on the back of harvest and weddings, and sustained demand visibility across mobility and freight. 

Category-wise, two wheeler grew 20.82% YoY, passenger vehicles (PV) 7.22% YoY, CV 15.07% YoY and tractors 22.89% YoY; three wheelers by 18.80% YoY.

On the other hand, Construction Equipment continues to remain under pressure at a negative sales of 21.09% YoY, indicating a high-base impact and segment-specific recalibration.

Two-wheelers led the charge with 18,52,870 units (20.82% YoY), with the rural share at 56% (urban 44%). While rural volumes stayed robust (Rural: a growth of 19.77% YoY) supported by Pongal/Makar Sankranti, marriage-season footfalls and better affordability.

“We are also seeing a clear revival in urban markets (Urban: growth of 22.19% YoY) — a healthy signal of demand normalisation beyond festive-only buying. Dealer feedback points to strong enquiry momentum driven by sharper customer engagement, quicker digital follow-ups, and a visible shift towards higher-value and mid-powered motorcycles,” said FADA president Mr. C S Vigneshwar.

“That said, selective model-wise supply constraints and aggressive competitive discounting continue to shape the near-term retail playbook in a few pockets,” he said.

Commercial Vehicles clocked 1,07,486 units (15.07% YoY), reflecting improving freight sentiment and replacement-led buying. 

“The uptrend is visible across tonnage bands, with LCV at 65,505 units (up 14.94% YoY) and HCV at 34,287 units (up 14.61% YoY), aligning with dealer feedback around stronger goods movement, infrastructure activity and renewed confidence among single-owner operators,” he said. 

Passenger Vehicles recorded 5,13,475 units (up 7.22% YoY). The mix remains urban-led at 59.2%, with rural at 40.8%; however, the growth story is increasingly being written in non-metro India — Rural PV grew 14.43% YoY, significantly ahead of Urban at 2.75% 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. Crucially, PV inventory levels continued to soften to ~32–34 days, which is a constructive indicator of healthier channel discipline and improved working-capital efficiency across the network,” he added.

According to FADA February’26 sentiment is firmly constructive, backed by supportive macros and on-ground dealer confidence as 72.56% of dealers expect growth and only 4.51% expect de-growth. 

“The operating environment is being strengthened by a growth-oriented Budget with a clear infra–agri thrust, continued wedding/festival tailwinds, and RBI rate stability on top of 2025’s easing—together improving affordability, financing comfort and purchase intent,” the FADA president said.