FADA Reports 17.6% YoY Growth in January 2026 Vehicle Retail Sales Driven by Strong Rural Demand

New Delhi, February 9, 2026: The Federation of Automobile Dealers Associations (FADA) has released its January 2026 vehicle retail data, reporting broad-based growth across most segments, supported by strong rural demand, favourable policy tailwinds, and improving consumer sentiment.

According to FADA, total vehicle retail sales stood at 27,22,558 units in January 2026, registering a year-on-year growth of 17.61%. Growth was led by two-wheelers, tractors, three-wheelers, and commercial vehicles, while construction equipment remained under pressure due to a high base effect .

Two-Wheelers Lead Retail Momentum

The two-wheeler segment continued to anchor overall retail momentum, clocking 18,52,870 units, up 20.82% YoY. Rural markets contributed nearly 56% of total volumes, driven by healthy cash flows from agriculture, seasonal festivals such as Pongal and Makar Sankranti, and increased marriage-season footfalls. Urban demand also showed signs of revival, signalling normalization beyond festive-led buying patterns .

Passenger Vehicles See Growth Beyond Metros

Passenger vehicle (PV) retail sales rose 7.22% YoY to 5,13,475 units. While urban areas continued to dominate the segment with nearly 59% share, rural markets outperformed cities in growth terms. Dealer feedback highlighted strong demand for SUVs and compact SUVs, improved product availability, and renewed traction in entry-level models. Inventory levels softened to a healthier 32–34 days, supporting retail stability .

Commercial Vehicles and Tractors Maintain Upward Trend

The commercial vehicle (CV) segment recorded 1,07,486 units, reflecting a 15.07% YoY increase, supported by improving freight sentiment and replacement demand. Both light and heavy commercial vehicles posted double-digit growth, with rural volumes marginally ahead of urban markets.

Tractor retail sales grew 22.89% YoY to 1,14,759 units, benefiting from a strong harvest season and improved farm income, reinforcing the continued strength of rural India in driving auto demand .

Mixed Performance in Other Segments

Three-wheelers posted healthy growth of 18.80% YoY, aided by last-mile mobility demand and steady replacement cycles. However, construction equipment (CE) retail declined 21.09% YoY, primarily due to a high base and selective slowdown in infrastructure-led purchases .

Outlook

FADA noted that post-GST momentum, increasing digital engagement at dealerships, and a shift towards higher-value models continue to support retail performance. However, dealers remain cautious due to competitive discounting, selective supply constraints, and evolving demand patterns as the market moves into the next quarter.