Our Bureau
New Delhi
Passenger vehicle retail sales in India surged 32.10% year-on-year to a record 4,27,213 units in September 2026, marking the segment’s best-ever performance for the month, according to data released by the Federation of Automobile Dealers Associations (FADA). Sales also rose 6.17% from August, signalling strong consumer demand ahead of the festive season.
The broader automobile retail market also recorded its strongest September on record, with total vehicle sales rising 31.82% year-on-year to 25,36,920 units. Retail sales increased 4.69% month-on-month, while the first half of FY27 recorded 1.55 crore vehicle sales, up 20.77% from the corresponding period last year. Five of the six major vehicle categories posted their highest-ever September retail numbers.
Passenger vehicle demand remained strong across both urban and rural markets. Urban retail sales grew 32.11% year-on-year, while rural sales increased 32.09%, indicating that the recovery was broad-based rather than concentrated in major cities.
Industry observers attributed the momentum to improved affordability following GST 2.0 tax-rate reductions, stable interest rates and positive consumer sentiment ahead of the festive period. Growing interest in alternative powertrains is also reshaping the market. Petrol accounted for 41.27% of passenger vehicle retail sales in September, while alternative fuels together held a 41% share. CNG accounted for 23.11%, hybrids 9.44% and electric vehicles 8.45%.
However, dealers remain cautious about sustaining the pace. FADA noted that recent vehicle price increases could put pressure on affordability, while passenger-vehicle inventory at dealerships has risen significantly ahead of the festive season.
With October expected to bring stronger festive demand, 75.57% of dealers surveyed by FADA anticipate growth during the month. The industry will closely watch whether the festive buying season converts the September momentum into sustained retail growth.