New Delhi, February 10 Automobile retail sales rose nearly 18 per cent year-on-year to over 27 lakh units in January, driven by continued momentum after the GST, healthy cash flows in rural areas due to harvest and weddings, and sustained demand visibility across freight, FADA said on Tuesday.
Overall retail sales last month reached 27,22,558 units, up 17.61 per cent, compared to 23,14,940 units in January 2025.
Retail sales of passenger vehicles stood at 5,13,475 units last month, a growth of 7 per cent, compared to 4,78,915 units in the previous year.
"The growth story is increasingly being written in non-metro India -- Rural PV grew by 14.43 per cent YoY, significantly ahead of Urban at 2.75 per cent YoY.
"This reinforces the structural expansion of PV demand beyond the top cities, aided by a strong preference for SUVs/compact SUVs, the revival of entry-level cars, product availability, and continued schemes," FADA President C S Vigneshwar said in a statement.
Retail sales of two-wheelers grew 21 per cent year-on-year to 18,52,870 units in January.
"While rural volumes remained robust, supported by Pongal/Makar Sankranti, wedding season demand, and improved affordability, we are also seeing a clear revival in urban markets, a healthy signal of demand normalization beyond festive season buying," Vigneshwar noted.
Sales of three-wheelers and commercial vehicles witnessed growth of 19 and 15 per cent, respectively, last month.
Tractor registrations rose 23 per cent year-on-year to 1,14,759 units in January.
On the business outlook for the next three months, FADA stated that dealer confidence remains decisively positive, with 79.70 per cent of respondents expecting growth and only 1.88 per cent indicating de-growth.
The near-term macro setup is supportive: a growth-oriented budget with a visible infrastructure and agricultural focus, policy continuity after GST 2.0, and rate stability after the easing in 2025 are collectively improving affordability, financing comfort, and purchase intent, it stated.
Ground-level feedback also points to stronger enquiry pipelines, tighter follow-ups, and increased local marketing/activation, which translates into higher conversion potential -- while the key watchouts remain election-related disruptions in select states, the usual seasonality/short-month effects, and model/variant availability in specific areas, FADA noted.
By category, two-wheelers are expected to maintain positive growth, driven by the conversion of pending enquiries, continued wedding/festival tailwinds improving rural liquidity from crops, and rising demand for scooters, commuter motorcycles, and electric vehicles -- although growth will be capped where OEM supply/variant constraints persist and where election codes impact footfalls, it said.
The outlook for commercial vehicle sales remains favorable throughout the quarter, as dealers report an upcycle supported by infrastructure project gearing, improving freight conditions, and Q4 replacement/addition decisions, with applications linked to construction/logistics and goods movement expected to perform better than discretionary categories, it said.
Passenger vehicles are expected to see a strong run in February-March, driven by a strong booking pipeline, new model/variant excitement, and year-end buying, it added.
April registrations are expected to normalize as festive intensity fades and base effects may play out unevenly across brands and regions, FADA stated.
Overall, the next three months remain optimistic, it added.