Domestic automobile retail sales rose 26 per cent year-on-year in February, continuing the demand seen after GST 2.0, dealers’ body FADA said on Thursday.

Total retail sales stood at 24,09,362 units last month compared with 19,17,934 units in February 2025, a rise of 25.62 per cent.

"The growth was broad-based across almost all segments...Five out of six categories -- two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and tractors -- registered their highest-ever February retail volumes, clearly highlighting the strength of underlying demand in the market," FADA President C. S. Vigneshwar said in a statement.

Two-wheelers grew 25 per cent, three-wheelers 24 per cent, passenger vehicles 26 per cent, and commercial vehicles 29 per cent on a year-on-year basis.

"On a YoY basis, two-wheelers grew by 25 per cent, three-wheelers by 24 per cent, passenger vehicles by 26 per cent, and commercial vehicles by 29 per cent, reflecting healthy demand across both personal mobility as well as economic activity-driven segments," Vigneshwar said.

Passenger vehicle sales rose to 3,94,768 units in February from 3,13,015 units in the same month last year.

"The momentum remained broad-based with urban markets growing 21 per cent YoY while rural markets surged 34 per cent YoY, indicating a strong continued demand beyond metros," Vigneshwar said.

"The sharper rural growth is particularly encouraging as it is supporting the sale of small cars, even as SUVs and utility vehicles continue to drive overall volumes," he added.

"Improved affordability following GST rationalisation, the marriage season and healthy booking pipelines supported by new model introductions also aided demand during the month," he said.

Two-wheeler retail sales rose to 17,00,505 units last month from 13,60,155 units a year ago. Dealers linked the rise to better rural liquidity after good crop outcomes, marketing schemes and improved affordability after GST revisions.

The marriage season and new launches also helped. Commercial vehicle sales increased to 1,00,820 units in February from 78,219 units in the year-ago period.

Dealers reported better freight availability, steady e-commerce activity and demand linked to infrastructure projects supporting fleet purchases. Some regions, however, faced supply issues for certain models.

Three-wheeler retail sales stood at 1,17,130 units, while tractor sales were 89,418 units. FADA said the outlook for March remains cautiously optimistic, with festive demand and year-end purchases expected to support sales.

"Overall, the next three months still appear cautiously optimistic - the growth momentum is intact, but compared to the sharper optimism seen earlier, the survey now indicates that the industry may gradually move from a phase of strong rebound to a phase of more stable and calibrated growth," it added.