Auto retail hits record 2.96 Crore units in FY’26; March sales jump 25%

India’s automobile retail sector closed FY’26 on a strong note, recording its highest-ever annual sales, while March 2026 emerged as the best-performing month on record with a sharp year-on-year jump in volumes across key segments.

Total retail sales in FY’26 stood at 2,96,71,064 units, up 13.30 per cent year-on-year. Growth was driven by a strong second half, which followed a relatively slow start to the year.

Two-wheelers remained the backbone of the market, with 2,14,20,386 units sold, rising 13.40%. Passenger vehicles reached 47,05,056 units, up 13.00 per cent. Commercial vehicles grew 11.74 per cent to 10,60,906 units, while three-wheelers increased 11.68 per cent to 13,63,412 units.

The recovery gathered pace from September onwards, supported by improved affordability and stronger buyer sentiment. This shift helped most segments reach new annual highs.

March sees peak monthly sales

March 2026 emerged as the strongest month on record, with total retail sales at 26,92,449 units, marking a 25.28 per cent year-on-year rise.

Two-wheelers led the surge, growing 28.68 per cent to 19,51,006 units. Passenger vehicles followed with 4,40,144 units, up 21.48 per cent. Commercial vehicles rose 15.12 per cent to 1,02,536 units, while three-wheelers increased 10.52 per cent to 1,09,777 units. Demand remained broad-based during the month, with rural markets continuing to outperform urban regions.

EV and alternative fuel trends

Electrification continued to gain ground during FY’26. Electric vehicles accounted for 60.95 per cent of three-wheeler sales, making it the most electrified segment. Two-wheeler EV penetration stood at 6.54 per cent, while passenger vehicle EV share reached 4.25 per cent.

CNG adoption also remained strong in passenger vehicles, with a 21.98 per cent share. In commercial vehicles, CNG accounted for 11.79 per cent, while EVs contributed 1.83 per cent. These trends highlight a gradual but steady shift in the market’s fuel mix.

Inventory and demand balance

Passenger vehicle inventory levels improved significantly, dropping to around 28 days from about 52 days a year earlier. This indicates better alignment between supply and demand after earlier imbalances.

Outlook remains measured

Dealers expect steady but cautious growth in the near term. About 50.56 per cent anticipate growth in April 2026, while sentiment for the next three months remains balanced.

For FY’27, 74.72 per cent of dealers expect growth, largely in the 3–7 per cent range. However, risks remain from fuel price fluctuations, supply disruptions, and broader economic conditions.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.