India’s automobile market closed 2025-26, on a strong note with total sales close to touching the 3 crore mark. The year ended with 2.97 crore vehicles sold of all types of automobiles as against 2.61 crore, in 2024-25. Demand was fueled by rural and urban Indians buying cars, two-wheelers, tractors and three-wheelers, according to vehicle dealers.
They said that, implementation of GST 2.0 rate cuts in September 2025, which reduced the effective tax burden on mass-segment two-wheelers, small cars, three-wheelers, and select commercial vehicles improved affordability to buyers and contributed to the pick-up in the market sentiments. The transition towards electric vehicles (EV) improved in 2025-26, reflected in the share of EVs increasing in almost all types of automobiles sold.
As such in two-wheelers the percentage of EVs to total sales was 6.5%, (previous year 6.1%), cars 4.2% (previous year 2.6%), and three-wheelers 61% (57.2% in 2024-25). EV penetration in commercial vehicles, commercial equipment, and tractors remains negligible.
According to market information shared by the Federation of Automobile Dealers Association (FADA), year 2025-26, witnessed interesting changes in the market presence of leading car companies.
Among manufacturers Maruti Suzuki Ltd., continued to dominate with a market share of 39.7 %, while Mahindra & Mahindra Ltd., moved into the second place (market share 13.4 per cent.) Hyundai Motors which was previously the 2nd largest car seller in India, slipped to the fourth position in FY26, (market share 12.3%), and Tata Motors Ltd., is in the third place (13% market share.)
The dealer’s body disclosed that across states total 47 lakh cars were sold in FY26 (previous year 41.6 lakh cars.) As such the demand in the luxury car segment was unchanged.
FADA, president CS Vigneshwar said that, FY26 has been a landmark year for India auto retail sales with a broad-based 13 per cent YoY growth that saw five of six vehicle categories set new annual records. “What makes the year particularly significant is that the growth was structurally sound, underpinned by improving affordability, widening mobility demand across urban and rural India, and a diversifying power train mix.”
For this financial year, 50% of dealers expecting growth in April, on the back of the marriage season demand in select northern and western markets. The festival of Akshaya Tritiya, celebrated widely in certain states could be an additional buying trigger.
Dealers however are concerned by the West Asia situation and its impact on supply and dispatches for commercial vehicles, cars and two-wheelers. On the fuel-price front, although petrol and diesel prices are steady it could adversely affect customer purchase decisions. “The West Asia crisis could shift customer preference further toward CNG fueled vehicles and EVs,” believes FADA.
