Indian retail auto sales jump 25.6% in February, total vehicle retails touch 24 lakh: FADA

India’s retail vehicle sales ‌rose 25.6% ⁠in ⁠February on strong demand for two-wheelers ⁠and passenger ‌vehicles, the Federation ‌of Automobile Dealers Associations (FADA) ⁠said in a report released on Thursday, terming February as the "landmark month for the Indian auto retail sector".

The total vehicle sales during the last month stood at 24.09 lakh units, marking a 25.62% annual growth. Looking ahead to March, FADA estimated that dealer sentiment would remain largely positive, with 75.51% of dealers expecting growth, while 19.90% foresee a stable market and only 4.59% anticipate a decline.

On an annual basis, two-wheelers recorded 17,00,505 units of sales, with a growth of 25.02%. FADA said that growth remained broad-based with urban markets rising 28.96% yoy and rural markets growing 22.16% yoy. This growth reflects steady demand across commuter as well as rural segments.

Three-wheeler sales grew by 24.39% last month, while passenger vehicles saw a 26.12% yoy surge in demand, and commercial vehicle sales rose by 28.89%. This reflects healthy demand across both personal mobility as well as economic activity-driven segments.

Passenger vehicle retail sales in February stood at 3,94,768 units, with urban markets growing 21.12% yoy and rural markets growing 34.21% yoy. FADA asserted that the sharper rural growth is particularly encouraging as it is supporting the sale of small cars, even as SUVs and utility vehicles continue to drive overall volumes.

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FADA noted that the strong performance during the month indicates that the policy-led confidence in the market, particularly following GST 2.0, is now translating into sustained demand across multiple vehicle segments.

Tractors emerged as the fastest-growing category during the month as they continued a strong run with a sharp 36.35% growth. The above-stated five categories registered their highest-ever February retail volumes, highlighting the strength of underlying demand in the market.

The construction equipment segment failed to register a fresh February record, registering a marginal decline of 1.22% yoy.

Auto dealers have attributed this performance to improved rural liquidity following good crop outcomes, attractive marketing schemes and better affordability post tax revisions, while the marriage season and new product introductions also supported enquiries.

As commercial vehicles recorded a sale of 1,00,820 units, dealers across regions reported improved freight availability, steady e-commerce activity and infrastructure-linked demand supporting fleet additions. The auto federation noted that some pockets saw supply constraints for certain models, though the overall pipeline of bookings and market movement remained encouraging.

As per data released by FADA, passenger vehicle inventory levels have further reduced by about five days and now stand at 27–29 days, which is an extremely healthy sign. "We appreciate PV OEMs for moving inventory closer to FADA’s recommended 21-day level, reflecting improved supply discipline and stronger alignment between wholesale dispatches and retail demand," FADA President Mr. C S Vigneshwar said.