New Delhi: The Federation of Automobile Dealers Associations (FADA) today reported that February 2026 has emerged as a landmark month for the Indian auto retail sector, marking the best-ever February performance for nearly all vehicle categories. Total vehicle retails reached 24,09,362 units, representing a robust 25.62% year-on-year (YoY) growth.

As per FADA, this record-breaking performance is attributed to the strong tailwinds from the GST 2.0 announcement, which improved market confidence and affordability across segments. Broad-based growth was observed in Two-Wheelers (2W), Three-Wheelers (3W), Passenger Vehicles (PV), Commercial Vehicles (CV), and Tractors, all of which registered their highest-ever February retail volumes.

Segment-Wise Performance Highlights

Tractors Take the Lead: Emerging as the fastest-growing category, tractors saw a sharp 36.35% YoY increase, reaching 89,418 units.

Passenger Vehicles (PV): Retails stood at 3,94,768 units, up 26.12% YoY. Notably, rural demand (+34.21%) significantly outpaced urban growth (+21.12%), providing a needed boost to the small car segment while SUVs continued to dominate.

Two-Wheelers (2W): The segment reached 17,00,505 units, a 25.02% YoY jump. Growth was broad-based, with urban markets rising by 28.96% and rural markets by 22.16%. Dealers cited improved rural liquidity from good crops and marriage season demand as key drivers.

Commercial Vehicles (CV): Maintaining healthy momentum, CV retails grew 28.89% YoY to 1,00,820 units, supported by infrastructure projects, e-commerce activity, and increased freight movement.

Construction Equipment (CE): This was the only segment to see a marginal decline, dipping 1.22% YoY to 6,721 units.

Inventory and Market Alignment

FADA President Mr. C. S. Vigneshwar noted a positive shift in the PV segment as inventory levels reduced to 27–29 days, moving closer to the industry’s recommended 21-day benchmark. This indicates a healthier alignment between manufacturer wholesale dispatches and actual retail demand.

Outlook: Cautious Optimism for the Financial Year-End

The near-term outlook for March 2026 remains positive, with 75.51% of dealers expecting continued growth. Demand is expected to be bolstered by the financial year-end buying cycle and a confluence of festivals, including Navratri, Ramzan, and Gudi Padwa.

However, the outlook for the next three months (March–May) has become more measured. While 67.35% of dealers still expect growth, this is a decrease from previous surveys, suggesting the market may be transitioning from a sharp “rebound phase” to a more stable and calibrated growth phase. Key factors to monitor include potential supply constraints for specific models and global geopolitical developments. DeshGujarat