Chennai: Automobile retail sales in India surged 32% year-on-year to a record 25,36,920 units in Sept 2026, according to data released by the Federation of Automobile Dealers Associations (FADA). Retail sales were also up about 5% from August.
Two-wheelers led the market with 17,90,188 units, registering 33% YoY and 4% MoM growth. It was the segment’s best-ever Sept and was 15% above the previous Sept peak recorded in 2018. Rural sales increased 33%, while urban sales rose 33%. The festive pickup, however, was stronger in urban markets, which grew 5% MoM compared with 4% growth in rural markets. Three-wheeler retail sales increased 22% YoY and 8% MoM to 1,32,570 units, also marking a record Sept.
Two-wheeler demand remained broad-based, with rural and urban markets growing almost equally on a yearly basis. Dealers attributed the growth to festive buying, steady rural and semi-urban demand, growing preference for premium motorcycles and rising electric vehicle adoption. Demand was nevertheless affected by Shraadh-related deferment towards the end of the month, along with supply constraints for some fast-moving models. Outlook
FADA, however, cautioned that the sharp annual growth was distorted by a weak base in Sept 2025, when buyers deferred purchases ahead of the implementation of GST 2.0 on Sept 22. The industry also recorded its best-ever first half of a financial year, with retail sales at 1,55,12,319 units, up 21% from the year-ago period. Passenger vehicle (PV) retail sales rose 32% YoY and 6% MoM to a record 4,27,213 units. PV sales reached a record Sept, with rural and urban markets growing almost identically at 32.09% and 32.11%, respectively. Petrol regained a marginal lead over alternative fuels, accounting for 41.27% of PV retail sales compared with 41% for alternative fuels. Within the latter, CNG accounted for 23.11%, hybrids 9.44% and EVs 8.45%. PV inventory, meanwhile, increased by another five days over Aug-end to about 43-45 days, significantly above FADA’s recommended 21-day level. Around 60% of PV dealers reported higher inventory ahead of the festive season. Electric vehicle retail sales across categories reached an all-time monthly high of around 3.34 lakh units in Sept, taking overall EV penetration to roughly 13%. Two-wheeler EV penetration reached 11.58%. Commercial vehicle sales grew 38% YoY and 14% MoM to 1,03,557 units, crossing the one-lakh mark in Sept for the first time. The Navratri period from Oct 11 to 20 and Dussehra are expected to trigger a sharp pickup as deferred demand from Pitru Paksha converts into deliveries. Booking pipelines are already building for 63% of dealers.
FADA said the August crossover, when alternative fuels overtook petrol, should therefore be viewed as an inflection point rather than a decisive shift. Because of last year’s GST-led festive surge, however, FADA cautioned that Oct will also face a high comparison base. You Can Also Check: Gold Rate in Chennai | Silver Rate in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai | Chennai AQI | Weather in Chennai | Petrol Price in Chennai | Diesel Price in Chennai | CNG Price in Chennai | LPG Price in Chennai Stay updated with the latest Chennai news.
“Sept’26 was the best-ever September in Indian Auto Retail,” FADA president Sai Giridhar said, adding that the 32% YoY growth should be viewed with caution because of the base effect. “Even setting the distorted Sept aside, FY27’s first five months grew about 17%, which is the truer underlying run-rate,” Giridhar said. However, the underlying trend remained strong, with Sept marking the best-ever month for five of the six major vehicle categories. The fuel mix remained closely contested. Petrol and alternative fuels are now effectively at parity, with the lead potentially changing from month to month. OEM supply constraints, vehicle price increases and rainfall-deficient regions are other risks. Overall, FADA has described the October outlook as “cautiously optimistic. Download the TOI App.