India's auto retail sales hit record high in September, FADA cautions

India's automobile retail sales grew 31.82% year-on-year to a record 25.36 lakh units in September. FADA noted this was the best-ever September for five of six vehicle categories but cautioned the high growth was distorted by a low base.

Automobile retail sales in India rose 31.82 per cent year-on-year to a record 25,36,920 units in September, with five of six vehicle categories posting their best-ever September sales, the Federation of Automobile Dealers Associations (FADA) said, while cautioning that the sharp annual growth was distorted by a low base last year.

Retail sales also increased 4.69 per cent month-on-month in September, taking the first half of FY27 sales to a record 1,55,12,319 units, up 20.77 per cent from the year-ago period. FADA said September's annual growth should be read with caution as buyers had deferred purchases in the corresponding month last year ahead of the implementation of GST 2.0. However, FADA cautioned that the 31.82 per cent growth was “the most base-distorted print of the year,” reflecting the unusually low base of September 2025, when buyers deferred purchases in the week before GST 2.0 took effect on September 22, 2025.

Category-wise Sales Performance

Two-wheeler retail sales rose 33.08 per cent year-on-year to 17,90,188 units, while passenger vehicle sales increased 32.10 per cent to 4,27,213 units.

Commercial vehicle sales grew 37.62 per cent to 1,03,557 units, crossing the one-lakh mark in September for the first time. Additionally, three-wheeler sales rose 22.25 per cent to 1,32,570 units, while wheeled construction equipment sales increased 38 per cent to 6,486 units.

Tractor sales were the only major category to see a month-on-month decline, falling 12.58 per cent in September, although they remained 13.75 per cent higher year-on-year at 76,906 units. FADA attributed the sequential weakness to the later festive calendar and patchy monsoon conditions.

FADA President's Commentary

FADA President Sai Giridhar said September was the industry's best-ever September but cautioned against relying on the headline growth rate. “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 (+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.”

EV Sales and Market Penetration

The September data also showed continued growth in electric vehicle sales. Total EV retail reached an all-time monthly high of about 3.34 lakh units, taking overall EV penetration to roughly 13 per cent, while electric two-wheelers accounted for 11.58 per cent of two-wheeler sales.

Future Outlook and Dealer Sentiment

Further, 75.57 per cent of dealers expect October sales to grow, with festive demand expected to pick up from mid-month during Navratri and Dussehra. FADA said the October outlook remains “Cautiously Optimistic”, though the high base from last year's GST-led festive surge will need to be watched.

For October-December, 78.28 per cent of dealers expect growth, while 49.5 per cent have raised their FY27 outlook after the record first half. FADA said festive demand conversion and affordability will be key to sustaining growth, particularly as rising prices could reduce the benefit of GST 2.0 for consumers. (ANI)

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