The Indian automobile industry in September 2026 registered retail sales of 25,36,920 units, up 31.82% year-on year (YoY) and a growth of 4.69% month-on-month (MoM), according to data released by the Federation of Automobile Dealers Association (FADA) on Tuesday (October 6, 2026).

Two-wheeler retail

Two-Wheeler retail sales stood at 17,90,188 units, up 33.08% YoY and 4.41% MoM — the best-ever September, now 15.3% above the pre-Covid September peak of 2018.

Dealers cited festive buying in the first half of the month, steady rural and semi-urban demand, a pull towards premium motorcycles and accelerating EV adoption, for the surge.Two wheeler EV share touched 11.58%.

Commercial Vehicle retails crossed the one-lakh mark in a September for the first time, at 1,03,557 units, up 37.62% YoY and 14.09% MoM.

Passenger Vehicle retails at 4,27,213 units, grew 32.10% YoY and 6.17% MoM. 

Petrol vehicle sale bounces back

After alternative fuels overtook petrol for the first time in August, petrol in September marginally bounced back to 41.27% against alternative fuels’ 41.00% (CNG 23.11%, Hybrid 9.44%, EV 8.45%), FADA said.

“The August crossover was therefore an inflection, not a decisive flip — petrol and alternative fuels are now effectively at parity, trading the lead month to month, even as EV share rose to a fresh high and CNG eased,” FADA preisdent Sai Giridhar said. 

Passenger vehicles inventory at dealerships rose by a further 5 days over August-end to around 43–45 days — well above FADA’s recommended 21-day benchmark, with 60% of PV dealers reporting higher stock due to upcoming festivals, he added. 

Three-Wheelers at 1,32,570 units (+22.25% YoY) recorded their best-ever September with EV penetration at 64.90%.

Tractors at 76,906 units grew 13.75% YoY but fell 12.58% MoM.

Wheeled Construction Equipment rose 38% to 6,486 units. 

EV penetration

Total EV retails across categories reached an all-time monthly high of about 3.34 lakh units, taking overall EV penetration to roughly 13%, according to FADA data. 

The reported growth in September 2026 was from a year ago period when buyers deferred purchases in the week before GST 2.0 took effect on 22 September 2025. So it does not provide the clear picture, FADA said. 

“The cleaner signals are three. It was the best-ever September across five of our six categories and, with it, the best-ever first half of any financial year at 1,55,12,319 units, up 20.77%; retail rose 4.69% over August; and even setting the distorted September aside, FY’27’s first five months grew about 17%, which is the truer underlying run-rate,” Mr Giridhar said. 

“One year on from GST 2.0, affordability remains the single engine of this cycle — and dealers now flag further price increases eroding that very affordability as their foremost risk for the quarter ahead. Protecting the GST gain is, to our mind, the key to converting the festive season into durable growth,” he added.

In the near-term outlook FADA said Two-Wheelers should see stronger booking-to-retail conversion on auspicious days, supported by rural cashflows, easier finance and rising EV interest.

Passenger Vehicles expect pending bookings to convert through Navratri and Dussehra, aided by fresh launches and festive schemes.

Commercial Vehicles should stay firm on freight, infrastructure and a healthy enquiry pipeline,” it stated. 

Published – October 06, 2026 11:25 am IST

Representative image.
| Photo Credit: The Hindu