Chennai: Automobile retail sales in India surged 32% year-on-year to a record 25,36,920 units in Sept 2026, according to data released by the Federation of Automobile Dealers Associations (FADA). Retail sales were also up about 5% from August.FADA, however, cautioned that the sharp annual growth was distorted by a weak base in Sept 2025, when buyers deferred purchases ahead of the implementation of GST 2.0 on Sept 22.“Sept’26 was the best-ever September in Indian Auto Retail,” FADA president Sai Giridhar said, adding that the 32% YoY growth should be viewed with caution because of the base effect.However, the underlying trend remained strong, with Sept marking the best-ever month for five of the six major vehicle categories. The industry also recorded its best-ever first half of a financial year, with retail sales at 1,55,12,319 units, up 21% from the year-ago period.“Even setting the distorted Sept aside, FY27’s first five months grew about 17%, which is the truer underlying run-rate,” Giridhar said.Passenger vehicle (PV) retail sales rose 32% YoY and 6% MoM to a record 4,27,213 units. PV sales reached a record Sept, with rural and urban markets growing almost identically at 32.09% and 32.11%, respectively.The fuel mix remained closely contested. Petrol regained a marginal lead over alternative fuels, accounting for 41.27% of PV retail sales compared with 41% for alternative fuels. Within the latter, CNG accounted for 23.11%, hybrids 9.44% and EVs 8.45%.FADA said the August crossover, when alternative fuels overtook petrol, should therefore be viewed as an inflection point rather than a decisive shift. Petrol and alternative fuels are now effectively at parity, with the lead potentially changing from month to month.PV inventory, meanwhile, increased by another five days over Aug-end to about 43-45 days, significantly above FADA’s recommended 21-day level. Around 60% of PV dealers reported higher inventory ahead of the festive season.Electric vehicle retail sales across categories reached an all-time monthly high of around 3.34 lakh units in Sept, taking overall EV penetration to roughly 13%. Two-wheeler EV penetration reached 11.58%.Commercial vehicle sales grew 38% YoY and 14% MoM to 1,03,557 units, crossing the one-lakh mark in Sept for the first time.Two-wheelers led the market with 17,90,188 units, registering 33% YoY and 4% MoM growth. It was the segment’s best-ever Sept and was 15% above the previous Sept peak recorded in 2018.Two-wheeler demand remained broad-based, with rural and urban markets growing almost equally on a yearly basis. Rural sales increased 33%, while urban sales rose 33%.The festive pickup, however, was stronger in urban markets, which grew 5% MoM compared with 4% growth in rural markets.Dealers attributed the growth to festive buying, steady rural and semi-urban demand, growing preference for premium motorcycles and rising electric vehicle adoption.Demand was nevertheless affected by Shraadh-related deferment towards the end of the month, along with supply constraints for some fast-moving models.Three-wheeler retail sales increased 22% YoY and 8% MoM to 1,32,570 units, also marking a record Sept.OutlookThe Navratri period from Oct 11 to 20 and Dussehra are expected to trigger a sharp pickup as deferred demand from Pitru Paksha converts into deliveries. Booking pipelines are already building for 63% of dealers.However, FADA cautioned that Oct will also face a high comparison base because of last year’s GST-led festive surge. OEM supply constraints, vehicle price increases and rainfall-deficient regions are other risks.Overall, FADA has described the October outlook as “cautiously optimistic.”
