Auto sales jump 13% to 2.61 million units on strong demand tailwinds

Total sales of vehicles across categories surged 13%, year-on-year, to 2.61 million units last month on back of sustained tailwinds from GST cuts, reduction in repo rates, healthy rural cashflows post a strong rabi cycle and an extended marriage season.

According to data collated by Federation of Automobile Dealers’s Associations (FADA) from the VAHAN portal of the Ministry of Road, Transport & Highways (MoRTH), registrations of two-wheeler, , commercial vehicles, three-wheelers and tractors were best-ever for the month of April. Only sales of construction equipment declined by about 2% last month. Industry stakeholders expect the growth momentum to continue in the coming months.

FADA Vice President Sai Giridhar said the Indian auto retail industry has opened FY27 on a strong note delivering the highest-ever April in record. “This clearly underlines that the structural demand momentum which defined the second half of FY’26 has carried into the new financial year. The sequential MoM softness of -3.01% (over 2.69 million units in March 2026) reflects the customary post-March seasonal reset rather than any erosion in underlying demand”, he informed.

In the two-wheeler segment, the demand engine remained broad-based with urban markets growing 14.07% YoY and rural markets growing 12.30%. Dealers attributed this performance to improved rural liquidity following a healthy rabi season, the extended marriage-season that runs through May and June, and continued affordability gains carried over from the GST 2.0 framework. EV share in 2Ws moderated to 7.76% in April from 9.79% in March — the latter having been amplified by pre-buying activity around the closing window of certain mass-segment EV incentives — yet remained well above the FY’26 average of 6.5%, FADA said.

Commercial vehicle retails in last month grew by 20.25%, while those in urban markets increased by 10.22%, highlighting that logistics-led demand is no longer concentrated in metros. Giridhar said, “Dealers across regions reported sustained freight movement, infrastructure-linked goods activity, school-bus replacement demand, and steady single-owner operator confidence as the principal drivers.”

In the passenger vehicle segment too, rural markets outperformed urban centres. Passenger in rural markets grew 20.40% YoY, nearly three times the urban pace of 7.11%. “This confirms the structural broadening of personal mobility into Tier-3 and rural India, supported by a small-car revival, sustained SUV demand and a richer alternative-powertrain product mix where CNG share held firm at 22.62% and EV share improved further to 5.77%”, Giridhar said.

Dealers said inventory levels in the passenger vehicle segment moved up modestly to a range of 28–30 days, from 26-28 days in March.

Demand in May is expected to be supported by the extended marriage season that peaks through May and June, residual buying triggered by Akshaya Tritiya in select northern and western markets, the new financial-year OEM scheme cycle and sustained replacement demand in the CV segment. However, the India Meteorological Department’s forecast of an above-normal heatwave across several states, the geopolitical situation in West Asia and its potential pass-through to fuel prices, selective supply constraints on running models remain factors to watch.