India Auto Retail Sales Surge 32% to Record 25.36 Lakh Units in September

Automobile retail sales across India rose 32% year-on-year to a record 25,36,920 units in September 2026, marking the highest September volume in the country's auto retail history, according to data released by the Federation of Automobile Dealers Associations. Sales also grew approximately 5% compared to August.

FADA noted that the steep annual growth rate was partly distorted by a low base in September 2025, when buyers deferred vehicle purchases ahead of the GST 2.0 rollout on September 22. FADA president Sai Giridhar stated that September 2026 was the best-ever September in Indian auto retail, though he cautioned that the 32% figure reflected the base effect. He added that the first five months of FY27 grew about 17%, representing the truer underlying run-rate.

Overall retail sales during the first half of the financial year reached a record 1,55,12,319 units, up 21% from the corresponding period last year. Passenger vehicle retail sales climbed 32% year-on-year and 6% month-on-month to a record 4,27,213 units. Rural and urban passenger vehicle markets experienced nearly identical growth at 32.09% and 32.11%, respectively.

In the passenger vehicle segment, petrol retained a slight lead over alternative fuels, accounting for 41.27% of retail sales compared with 41% for alternative fuels. Among alternative fuels, CNG made up 23.11%, hybrids 9.44%, and electric vehicles 8.45%. Passenger vehicle dealer inventory expanded by five days over August-end to between 43 and 45 days, substantially above FADA’s recommended 21-day threshold, with around 60% of dealers reporting elevated stock ahead of the festive season.

Across all vehicle categories, electric vehicle retail sales reached an all-time monthly high of approximately 3.34 lakh units, lifting total electric vehicle penetration to roughly 13%. Commercial vehicle registrations crossed the one-lakh mark in September for the first time, expanding 38% year-on-year and 14% month-on-month to 1,03,557 units.

Two-wheelers continued to lead the broader market, recording 17,90,188 units, which marked a 33% year-on-year rise and a 4% increase over August. The volume was 15% above the previous September peak recorded in 2018, with electric two-wheeler penetration reaching 11.58%. Three-wheeler retail sales also achieved a record September, rising 22% year-on-year and 8% month-on-month to 1,32,570 units.

Looking ahead to October, FADA maintained a cautiously optimistic stance. Demand is anticipated to gain momentum during Navratri between October 11 and October 20 and Dussehra, with booking pipelines building for 63% of dealers following late-September Shraadh deferments. However, the association cautioned that October faces a high comparison base alongside potential headwinds from OEM supply constraints, price increases, and rainfall-deficient regions.