PV retail sales climb 26% to 0.39 million units in February; rural demand outpaces urban growth: FADA

Passenger vehicle (PV) retail sales rose 26.12% year-on-year to 0.39 million units (3,94,768 units) in February 2026, marking the strongest-ever February for the segment, with rural demand significantly outpacing urban markets, according to data released by Federation of Automobile Dealers Associations (FADA).

The sharp expansion in PV sales came amid a broader surge in auto retail, with total vehicle registrations climbing 25.62% YoY to 2.41 million units. However, passenger vehicles emerged as the clear anchor of growth, underpinned by widening demand beyond metros, healthy booking pipelines and improved supply discipline, according to the auto retail body.

FADA President C. S. Vigneshwar described February as a landmark month for the auto retail sector, noting that passenger vehicles recorded robust double-digit growth despite the shorter month. He said the performance surpassed the previous best February, reflecting strengthening market confidence and sustained consumer appetite.

Notably, domestic PV wholesales rose 10–11% year-on-year (Y-o-Y) in February 2026, reflecting sustained demand across segments, with market leader Maruti Suzuki India Limited (MSIL) and peers Tata Motors, Mahindra & Mahindra (M&M), Hyundai Motor India and Toyota Kirloskar Motor (TKM) reporting higher volumes.

Beyond passenger vehicles, other segments also reported strong double-digit gains. Two-wheeler retail sales rose 25.02% YoY to 1.70 million units, three-wheelers grew 24.39% to 1,17,130 units, and commercial vehicles advanced 28.89% to 1,00,820 units. Tractors posted the fastest growth at 36.35%, while construction equipment was the only category to see a marginal decline.

Rural markets take the lead

A key highlight of February’s PV performance was the strong rural acceleration. Rural passenger vehicle sales grew 34.21% YoY, comfortably ahead of 21.12% growth in urban markets. The widening gap indicates that demand recovery is now more broad-based, extending deeper into non-metro regions.

Dealers attributed the rural momentum to improved agricultural cash flows, better liquidity, marriage-season purchases and improved affordability following GST rationalisation. While SUVs and utility vehicles continued to drive overall volumes, the resurgence in rural sentiment also supported small car sales, a segment that had been under pressure in recent years.

On a sequential basis, PV retail declined 23.12% compared with January due to seasonality and fewer working days, though the annual trajectory remained firmly positive.

Inventory alignment strengthens

PV inventory levels reduced further, moving closer to the recommended 21-day benchmark. The moderation in stock levels signals tighter coordination between manufacturers and dealers, reducing working capital stress and improving retail efficiency, according to FADA.

“Encouragingly, PV 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, “ added Vigneshwar.

The improved inventory discipline is being seen as a constructive structural shift, particularly as the industry enters the financial year-end sales period.

Business outlook

Looking ahead to March, dealer sentiment remains optimistic, with a majority expecting growth supported by Navratri, Ramzan, Ugadi and Eid, along with year-end buying that typically boosts passenger vehicle sales. Customers may also advance purchases ahead of potential price revisions.

“In Passenger Vehicles, March should remain strong on account of year-end buying, Navratri-led demand, low stocks and new product excitement, but April and May are expected to be more normal to soft as seasonal lull, summer months and demand pause after the festive push may come into play,” noted Vigneshwar

For the March–May quarter, however, expectations have become more measured, suggesting the market may be transitioning from a sharp rebound phase to a more stable growth cycle.