Passenger vehicle sales rise 7% in Jan; two-wheelers see 21% jump

Retail sales of passenger cars rose 7% year-on-year (YoY) to 513,475 units in January as rural India recorded robust growth, according to data released by the Federation of Automobile Dealers Associations (FADA).

“The growth story is increasingly being written in non-metro India—rural passenger vehicle sales grew 14.43% year-on-year, significantly ahead of urban at 2.75%,” says FADA President C S Vigneshwar.

“This reinforces the structural expansion of PV demand beyond the top cities, aided by a strong SUV (sport utility vehicle) preference, revival of entry level cars, product availability and continued schemes,” Vigneshwar adds.

Still, urban areas contribute 59% to total car sales while rural India’s share in the mix stands at around 41%.

Maruti Suzuki led the charge with 42% market share in January. The Japanese carmaker sold 216,043 cars while Hyundai Motor India reclaimed the second spot in the pecking order with sales of 65,914 units. JSW MG Motor, Honda Cars and BYD India were among the few carmakers that recorded a decline in year-on-year sales.

In the luxury market, BMW overtook its German rival Mercedes-Benz, which saw a decline in January sales. JLR, too, saw a marginal drop in volumes.

Two-wheeler sales soared 21% YoY to 1,852,870 units in January, according to FADA. The demand engine remained anchored in Bharat, with the rural share at around 56%, says Vigneshwar.

Hero MotoCorp and Honda Motorcycle account for over half of India’s domestic two-wheeler market with 27% and 26% shares, respectively. TVS Motor Company is the third largest with nearly 20% market share.

While rural volumes stayed robust with 20% YoY growth supported by festivals, marriage-season footfalls and better affordability due to the Goods and Services Tax cut, FADA sees a clear revival in urban markets which clocked 22% YoY growth—a healthy signal of demand normalisation beyond festive-only buying.

The growth was powered by continued post-GST momentum, healthy rural cashflows on the back of harvest and weddings, and sustained demand visibility across mobility and freight, says Vigneshwar.

Commercial Vehicles clocked 1,07,486 units, up 15.07%, reflecting improving freight sentiment and replacement-led buying, as per FADA data.

EV penetration slows

Even as retail sales of cars and two-wheelers witnessed a significant increase, the penetration of electric vehicles saw a decline on a monthly basis.

In passenger vehicles, only 3.6% of all new cars sold in January were electric compared with 3.9% EV penetration in December 2025.

In two-wheelers, 6.6% of all new vehicles sold were electric as against 7.4% EV penetration in December.

In three-wheelers, the penetration of electric vehicles dropped from 69% in December 2025 to 59% in January 2026.