Rural mkt boost drives passenger vehicle sales up 7% in Jan, says Fada

Driven by a stellar show in the rural market, passenger vehicle retail sales for January zoomed 7.22 per cent to 513,475 units compared to the same month last year, said data shared by the Federation of Automobile Dealers Associations (Fada) on Tuesday.

 

Overall, automobile retail sales, including passenger vehicles, too increased by 17.6 per cent to 2.72 million units. The growth was powered by continued post-GST momentum, healthy rural cash flow on the back of harvest and weddings, and sustained demand visibility across mobility and freight.

 

Though the passenger vehicle mix still remains urban-led at 59.2 per cent, with rural at 40.8 per cent, rural market posted a growth of 14.4 per cent during the month versus 2.75 per cent in urban market. 

   

In a sign of increased competition, Hyundai Motor became the number two car maker after several months, with a market share of 12.84 per cent (65,914 units), followed closely by Tata Motors with 12.38 per cent (63,558), and Mahindra & Mahindra at 12.34 per cent (63,366). Maruti Suzuki continued to be the number one player with 42 per cent market share, and 2,16,043 units, up marginally from 214,494 units in January 2025. 

 

“This reinforces the structural expansion of PV demand beyond the top cities, aided by a strong SUV/compact-SUV preference, revival of entry level cars, product availability and continued schemes. Crucially, PV inventory levels continued to soften to 32–34 days, which is a constructive indicator of healthier channel discipline and improved working-capital efficiency across the network,” said C S Vigneshwar, president, Fada.

 

During the month, two-wheelers led the charge with 1.85 million units (up 20.82 per cent Y-o-Y). Importantly, the demand engine of two wheelers remains anchored in Bharat, with the rural share at 56 per cent versus 44 per cent in urban.

 

“While rural volumes stayed robust with a 19.77 per cent growth Y-o-Y supported by Pongal, Makar Sankranti, marriage-season footfalls and better affordability, we are also seeing a clear revival in urban markets moving up 22.19 per cent, a healthy signal of demand normalisation beyond festive-only buying,” Vigneshwar said.

 

Dealer feedback points to strong enquiry momentum driven by sharper customer engagement, quicker digital follow-ups, and a visible shift towards higher-value and mid-powered motorcycles, Fada said.

 

Commercial vehicles clocked 107,486 units (up 15.07 per cent), reflecting improving freight sentiment and replacement-led buying. The uptrend is visible across tonnage bands, with LCV at 65,505 units (14.94 per cent) and HCV at 34,287 units (14.61 per cent), aligning with dealer feedback around stronger goods movement, infrastructure activity and renewed confidence among single-owner operators.

 

Three wheelers remained resilient at 18.80 per cent growth. On the other hand, construction equipment continues to remain under pressure down 21.09 per cent in January, indicating a high-base impact and segment-specific recalibration.

 

“Passenger vehicle should see steady traction driven by a strong booking pipeline, new launch/variant excitement and continued GST-led affordability, with incremental support from rural demand during the marriage season; nonetheless, a high base, allocation/production constraints could make growth more measured, alongside ongoing focus on VIN-wise inventory clean-up,” he said.