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Informist, Monday, Apr. 6, 2026

NEW DELHI – Automobile retail sales in both urban and rural India grew in double-digits in 2025-26 (Apr-Mar), with sales in urban areas expanding a tad faster year-on-year, primarily due to increased demand for two-wheelers in these areas, data from the Federation of Automobile Dealers Association showed Monday.

Retail sales of automobiles grew 13.3% on year in FY26 to 29.67 million units. Sales in rural India grew 13.05% on year while sales in urban areas grew a shade quicker, at 13.62%. 

"For FY'26, total rural retail grew 13.05% against 13.62% in urban — a near-parity that reflects the expanding aspirational footprint of auto retail in the hinterland, aided by better rural incomes, improving road connectivity, and increasing last-mile mobility needs," FADA President C.S. Vigneshwar said in a press release.

Rural areas accounted for 57.8% of all automobiles sold in India in FY26, up from 56.4% a year ago, while urban areas accounted for 42.2%, down from 43.6% a year ago.

Urban areas edged ahead of rural areas primarily because of the two-wheeler segment, which formed roughly 72% of the automobiles sold in India. Their sales grew 13.40% on year to 21.42 million units in FY26.

Contribution of rural areas to two-wheeler sales fell to 57.8% in FY26 from 58.5% in FY25. This was because sales of two-wheelers in rural India grew only 12.11% on year while sales in urban India raced ahead, up 15.21%.

Passenger vehicles are the second-largest segment of automobiles, accounting for roughly 16% of the total sales. Dealerships sold 4.71 million passenger vehicles in FY26, up 13% on year. Urban India lost its share of this segment in FY26 but continued to dominate.

Urban India accounted for 60.3% of the passenger vehicles sold in India in the last financial year, down from 61.7% in FY25. Rural areas bought more passenger vehicles in FY26 as these areas accounted for 39.7% of the cars sold in India in FY26, up from 38.3% the year before. Passenger vehicles' retail sales grew 10.43% in urban areas and 17.12% in rural areas.   End

Reported by Anand JC

Edited by Akul Nishant Akhoury

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