Auto sales hit record 2.59 million units in July, rise 26% year-on-year

Vehicle registrations – which reflects retails made by dealers to customers – rose by 26% to 2.59 million units year-on-year in July, marking the best-ever sales for the month for two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors amid sustained consumer demand post GST cuts.

The strong growth last month, however, came on a low base as auto sales in the local market was weak last year in the run-up to the GST reset which came into effect at the end of September 2025.

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As per data collated by the Federation of Automobile Dealers Associations (FADA) from the VAHAN portal of the Ministry of Road Transport & Highways (MoRTH), two-wheeler sales last month rose 28%. Sales of three-wheelers, passenger vehicles and commercial vehicles went up by 16%, 19% and 24%, respectively in July.

Source : FADA

FADA Vice President Sai Giridhar said, “For the first time on record, every single category posted its best-ever July, with two-wheelers, three-wheelers, commercial vehicles, passenger vehicles, tractors all at all-time July highs.”

Dealers attribute this momentum to GST 2.0-led affordability, ease of retail finance and favourable festival timing.

Rural markets outperformed urban centres across segments. While two-wheeler sales in rural markets went up by 29% last month, those on urban centres grew by 28% in the same period. The share of electric in total two-wheeler sale touched a record 11.2% last month compared to 7.7% in the year-ago period.

In the commercial vehicle segment too, rural markets again led decisively, growing by 29% YoY against 19% reported in urban centres. Dealers said cement, steel and mining-linked movement, e-commerce logistics and improving finance availability boosted sales, even as demand for school buses tapered. The share of electric in the CV segment at 3.57% marked another all-time high against 1.65% a year ago.

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Sales of passenger vehicles in rural markets grew 25%, as against 16% in urban areas supported by improved affordability post GST cuts, new launches and marketing schemes from automakers.

FADA said consumer hesitation around the E20 transition nudged buyers towards CNG, hybrids and EVs. With this the share of alternative-fuel CNG

24.67%, Hybrid 8.02%, EV 7.90%) reached 40.59%, compared to petrol’s at 41.68%. The gap between the share of alternative fuel options and petrol had stood at 13.21 points only a year ago. PV inventory rose by another day over June-end to 33–35 days.

Total EV retails last month grew to a record 3,27,901 units, taking overall EV penetration to about 12.7% from 9.6% a year ago.

With the festive season set to start later this month with the Onam in Kerala, dealers are optimistic of the growth momentum continuing in the coming months. Booking pipelines are already building, FADA said.

Giridhar said, “In two-wheelers, rural sentiment should continue mending as rainfall has recovered, though Kharif sowing still trails last year by about 4.7% and forecasts of a below-normal August make rainfall the single biggest swing factor for Bharat. Passenger Vehicles enter August with healthy pipelines and fresh launches, but need clear and confident

consumer communication on the E20 fuel transition to convert hesitant petrol buyers, alongside disciplined dispatches given elevated inventory.” Demand for commercial vehicles too should stay steady on freight, infrastructure and e-commerce activity, he added.

He informed with retails up in the first four months of the fiscal a record 18.27%, GST 2.0 affordability intact, the repo rate steady at 5.25%, PM E-DRIVE accelerating electrification and rural cashflows rebuilding on a recovered monsoon, “the structural India Growth Story runway into the festive season remains firmly supportive.”