India’s vehicle retail sales hit a record in September 2026. According to the Federation of Automobile Dealers Associations (FADA), 25,36,920 vehicles were sold during the month, up 31.82% year-on-year and 4.69% over August. It was the best September ever, and it capped the industry’s best-ever first half of a financial year, with April–September sales rising 20.77% to 1,55,12,319 units.
FADA President Mr. Sai Giridhar raised caution in reading the numbers as he called the 31.82% growth “the most base-distorted print of the year,” because many buyers held back purchases last September in the week before GST 2.0 took effect on 22 September 2025. The clearer signals, he said, are the records themselves, the month-on-month rise, and underlying growth of about 17% in the first five months of FY27.
Five of the six vehicle categories posted their best September ever. Two-wheeler sales grew 33.08% to 17,90,188 units, now 15.3% above the pre-COVID peak of 2018, helped by festive buying, demand for premium motorcycles and rising EV adoption. Passenger vehicle sales rose 32.10% to 4,27,213 units, with urban and rural markets growing at almost exactly the same pace.
Commercial vehicles crossed one lakh units in a September for the first time, rising 37.62% to 1,03,557. Heavy trucks led with 46% growth, driven by infrastructure and mining activity, fleet replacement and buying ahead of October price increases. Three-wheeler sales grew 22.25% to 1,32,570 units, with electric models making up nearly 65% of the segment. Construction equipment jumped 38% to 6,486 units.
Tractors were the one soft spot. Sales rose 13.75% from a year earlier to 76,906 units but fell 12.58% from August, as patchy monsoon rains and a later festive calendar weighed on demand.
Electric vehicles reached an all-time monthly high of about 3.34 lakh units, taking overall EV penetration to roughly 13%. In passenger vehicles, petrol and alternative fuels are now neck and neck. After alternative fuels overtook petrol for the first time in August, petrol edged slightly ahead in September with a 41.27% share, against 41% for CNG, hybrids and EVs combined.
Among manufacturers, Honda led the two-wheeler market with a 26.19% share, followed by Hero MotoCorp and TVS Motor. Maruti Suzuki held 39.59% of passenger vehicle sales, while Mahindra edged past Tata Motors for second place. Tata Motors led commercial vehicles with a 34.70% share, and Mahindra remained the top tractor maker.
FADA flagged one concern. Passenger vehicle inventory at dealerships rose by another five days to around 43–45 days, well above its recommended 21 days, as dealers stocked up ahead of the festive season.
Dealers are upbeat about the coming months. About 75.57% expect growth in October, as demand held back during Pitru Paksha converts during Navratri and Dussehra, and 78.28% expect growth across October to December. Nearly half have raised their outlook for FY27. Still, FADA described the mood as “cautiously optimistic.” October will offer the first clean year-on-year comparison since GST 2.0, against a high base, and dealers see rising vehicle prices eating into the GST benefit as the biggest risk ahead.