PV retail sales in India surged 32.10% year-on-year to a record 4,27,213 units in September 2026, according to the Federation of Automobile Dealers Associations (FADA), as demand strengthened ahead of the festive season. Passenger vehicle retail sales also rose 6.17% from August’s 4,02,398 units, making September the segment’s best-ever month.

Key Highlights

• PV retail sales surged 32.1% year-on-year to record 4.27 lakh units in September, FADA data showed.
• Festive demand, GST 2.0 benefits and stronger consumer sentiment boosted India’s record automobile retail performance.

The broader automobile retail market also posted its strongest September on record, with total registrations rising 31.82% YoY to 25,36,920 units. Registrations increased 4.69% month-on-month, indicating a broad-based improvement in vehicle demand.

PV Retail Sales Hit Record High Ahead of Festive Season

FADA President Sai Giridhar said the headline growth should be viewed against a distorted base, as many customers had deferred vehicle purchases in September 2025 ahead of the implementation of GST 2.0.

He cited three other more positive indicators, however, as September was the best month for five of FADA's six vehicle groups, overall retail sales increased by 4.69% year-on-year and the first five months of FY27 were up some 17% despite the distorted September base.

The strong performance is welcomed as auto makers and dealerships find themselves in the key sales season, and consumer affordability will likely play a major role.

Also Read: Passenger Vehicle Sales Surge 36.4% YoY to 4.5 Lakh Units in August

Two-Wheeler, Commercial Vehicle Sales Drive Auto Retail Growth

The retail sales of two wheelers rose by 33.08% YoY to reach 17,90,188 units, the best ever September for the segment. Festive demand helped sales to rise 4.41% sequentially, while the steady rural and semi-urban demand, growing demand for premium motorcycle and rapid EV adoption supported the growth.

Two-wheeler EV penetration reached 11.58%. However, Shraadh-related purchase deferment and supply shortages in some fast-moving models moderated growth.

Commercial vehicle retail sales crossed the one-lakh mark for the first time in September, rising 37.62% YoY and 14.09% MoM to 1,03,557 units. Heavy commercial vehicles recorded a 46.22% YoY increase, supported by replacement demand, infrastructure and mining activity, bulk fleet purchases and higher rural incomes.

EV Retail Sales Reach Record, PV EV Penetration at 8.45%

Electric vehicle sales continued to gain momentum across categories. Total EV retail sales reached an all-time monthly high of around 3.34 lakh units, taking overall EV penetration to approximately 13%.

Within passenger vehicles, EV penetration increased to a fresh high of 8.45%. Petrol and ethanol accounted for 41.27% of PV sales, compared with 41% for alternative fuels, highlighting the increasingly competitive fuel mix.

Three-wheeler retail sales also climbed 22.25% YoY to 1,32,570 units, with EVs accounting for 64.90% of sales. Wheeled construction equipment retail sales rose 38% to 6,486 units.

PV Inventory Rises to 43-45 Days

Despite record PV retail sales, FADA flagged elevated inventory levels at dealerships. Passenger vehicle inventory stood at 43–45 days, significantly above the association’s recommended 21-day level.

Giridhar said affordability would be critical through the festive season and warned that further price increases could potentially erode the gains from GST 2.0.

Tractor retail sales remained the only major category to decline sequentially, falling 12.58% MoM to 76,906 units, although they were still 13.75% higher YoY. FADA attributed the monthly decline to the later festive calendar and patchy monsoon conditions.

Festive Quarter to Test Sustainability of Auto Demand

Dealer sentiment remains positive heading into the festive period. According to FADA, 75.57% of dealers expect growth in October, while 78.28% anticipate growth during October-December.

The festive quarter will therefore be a key test for whether the sharp rise in PV retail sales and overall automobile retail market in terms of registrations can translate into sustained demand beyond the favourable base effect and GST 2.0-led benefits.