The Indian passenger vehicle industry continued its upward trajectory in February 2026, recording wholesale dispatches of 3.55 lakh units — a healthy 7.3% increase over the 3.31 lakh units sold in February 2025. The growth was broad-based, with most major manufacturers reporting positive numbers. Tata Motors stole the spotlight with an impressive 33.7% year-over-year jump, while Mahindra & Mahindra and Hyundai Motor India also posted double-digit and near-double-digit gains respectively. Maruti Suzuki, India's largest carmaker, maintained its dominant market position with 1.64 lakh units dispatched. These numbers signal sustained consumer confidence and a robust demand environment heading into the traditionally strong March quarter-end period.
February 2026 Sales Overview: Strong Momentum Continues
India's passenger vehicle segment has now posted positive growth for six consecutive months, underscoring the resilience of domestic demand despite global economic headwinds. The February 2026 tally of 3,55,000 units represents one of the strongest February performances in recent years, building on the momentum from a record-breaking January.
Industry body SIAM attributes the growth to multiple tailwinds — improving rural sentiment after a strong monsoon, new model launches across price segments, and aggressive financing offers from NBFCs and banks. Interest rates on car loans have stabilised around 8.5-9.5% per annum, keeping EMIs affordable for first-time buyers in Tier 2 and Tier 3 cities.
Key Context: February typically sees a seasonal uptick as manufacturers push dispatches ahead of the March financial year-end. Dealer-level registrations (retail sales) also tracked positively, suggesting genuine demand rather than inventory stuffing.
The utility vehicle (UV) sub-segment, which includes SUVs and MPVs, continued to be the primary growth engine. UV wholesales crossed 1.75 lakh units in February, accounting for nearly 49% of total PV sales. This marks a significant structural shift from even five years ago, when sedans and hatchbacks dominated the market. Compact and mid-size SUVs priced between Rs. 8-18 Lakh remain the sweet spot for Indian buyers.
Brand-Wise Breakdown: Who Gained and Who Lagged
The February 2026 sales data reveals a clear picture of winners and steady performers. While no major brand reported a decline, the pace of growth varied significantly. Here is the complete brand-wise breakdown of the top manufacturers:
| Manufacturer | Feb 2026 (Units) | Feb 2025 (Units) | YoY Growth |
|---|---|---|---|
| Maruti Suzuki | 1,64,000 | 1,55,000 | +5.8% |
| Hyundai Motor India | 55,800 | 50,800 | +9.8% |
| Tata Motors | 52,500 | 39,300 | +33.7% |
| Mahindra & Mahindra | 42,100 | 36,250 | +16.1% |
| Kia India | 21,500 | 19,800 | +8.6% |
| Toyota Kirloskar | 18,700 | 16,400 | +14.0% |
| Others (Honda, Skoda, VW, etc.) | 20,400 | 13,450 | +51.7% |
| Total PV | 3,55,000 | 3,31,000 | +7.3% |
Maruti Suzuki retained the top spot with 1.64 lakh units, growing 5.8% year-over-year. The Brezza, WagonR, and the new-generation Swift continued to be volume drivers. The Fronx and Grand Vitara also contributed meaningfully, helping Maruti shore up its UV portfolio against the competition.
Tata Motors was the standout performer with 33.7% growth, dispatching 52,500 units. The Nexon and Punch duo crossed a combined 30,000 units, while the Harrier and Safari refreshes brought renewed interest. Tata's EV portfolio, led by the Nexon EV, also contributed nearly 7,000 units — the highest-ever monthly EV tally for any Indian OEM.
Tata EV Milestone: With nearly 7,000 electric vehicles dispatched in February alone, Tata Motors now commands over 60% of India's passenger EV market. The upcoming Curvv EV and Harrier EV are expected to further widen this lead in FY27.
Mahindra & Mahindra posted 16.1% growth to 42,100 units, powered by the Scorpio N, Thar, and XUV700. The company's UV-focused strategy continues to pay dividends, with average selling prices rising as buyers opt for higher-spec variants. Hyundai grew 9.8% to 55,800 units on the strength of the Creta, Venue, and the recently launched Creta EV.
Segment-Wise Trends: SUVs Dominate, Hatchbacks Stabilise
The shift towards utility vehicles has been the defining trend of the Indian auto market over the past three years, and February 2026 data reinforces this further. SUVs and crossovers now account for nearly half of all passenger vehicle sales, up from 37% just two years ago. This has significant implications for both new and used car markets.
| Segment | Feb 2026 Share | Feb 2025 Share | Trend |
|---|---|---|---|
| Hatchbacks | 26% | 29% | ↓ Declining |
| Sedans | 7% | 8% | ↓ Declining |
| Compact SUVs (Sub-4m) | 24% | 22% | ↑ Growing |
| Mid-Size SUVs | 19% | 17% | ↑ Growing |
| MPVs/MUVs | 8% | 8% | → Stable |
| Full-Size SUVs & Others | 6% | 6% | → Stable |
| EVs (All segments) | 10% | 10% | → Stable |
Compact SUVs priced between Rs. 7-12 Lakh — models like the Tata Nexon, Maruti Brezza, Hyundai Venue, and Kia Sonet — remain the highest-volume segment. These vehicles offer the ground clearance, space, and features that Indian buyers prioritise, at price points competitive with premium hatchbacks.
Hatchback Stabilisation: While hatchback share has been declining, the pace of decline has slowed. Models like the WagonR, Swift, and Tiago still command strong loyalty in the sub-Rs. 8 Lakh segment, particularly among first-time buyers and those upgrading from two-wheelers.
The EV segment held steady at approximately 10% of total PV sales. While this is a promising figure by Indian standards, growth appears to have plateaued temporarily as buyers await more affordable offerings below the Rs. 10 Lakh mark. The upcoming Tata Curvv EV, Mahindra XUV 3XO EV, and Maruti eVX are expected to unlock the next wave of EV adoption in the second half of 2026.
Key Growth Drivers Behind the February Numbers
Several macro and micro factors converged to deliver February's strong performance. Understanding these drivers helps put the numbers in perspective and indicates whether the momentum is sustainable through the rest of FY26-27.
Rural Recovery
Good monsoon and strong Rabi crop outlook have boosted rural purchasing power, driving demand in Tier 2/3 cities.
New Model Launches
Over 15 new models or facelifts launched in Q4 FY26, including refreshed Creta, Harrier, and the new Maruti Fronx Turbo.
Stable Interest Rates
RBI's accommodative stance has kept auto loan rates at 8.5-9.5%, making EMIs manageable for the middle class.
March Year-End Push
Dealers traditionally stock up in Feb for the March rush. Corporate and fleet buyers also close orders before financial year-end.
Rising Income Levels
India's per capita income crossed Rs. 2 Lakh in FY26, pushing more households into the first-car-buying bracket.
Infrastructure Growth
Expanding highway and expressway network is making car ownership more practical in semi-urban and rural India.
Analysts at ICRA and CRISIL have maintained their full-year FY26 PV growth estimate at 6-8%, suggesting that February's 7.3% growth is well within the expected trajectory. The March 2026 numbers are expected to be even stronger, potentially crossing the 4 Lakh unit mark for the first time in any single month.
What This Means for Used Car Buyers and Sellers
Strong new car sales have a direct and significant impact on the used car market. When new vehicle dispatches rise, it inevitably increases the supply of pre-owned vehicles within 12-24 months — as trade-in volumes go up and leasing returns hit the secondary market. For used car buyers, this is broadly positive news.
For Used Car Buyers: Higher new car sales today mean more well-maintained, low-kilometre used cars entering the market in 2027-2028. If you are looking for a 1-2 year old Creta, Nexon, or Brezza at a 20-30% discount, the supply pipeline is growing stronger.
The SUV-heavy sales mix also means that used SUV availability will improve substantially. Models like the Tata Nexon, Hyundai Creta, and Maruti Brezza are already among the most sought-after used cars on VahanBazaar. With 50,000+ new Nexons being sold every month, the used market for these models will become increasingly buyer-friendly.
For Used Car Sellers: If you own a popular SUV model (Nexon, Creta, Scorpio, Brezza), now is a good time to list. Demand for used SUVs remains strong, and resale values for 2-4 year old SUVs are holding at 65-75% of the original ex-showroom price. Waiting too long could mean competing with more supply.
The declining hatchback share in new sales has a different implication. Fewer new hatchbacks being sold means the used hatchback supply is tightening. If you are a budget buyer looking for a used Maruti Swift, WagonR, or Hyundai i20 under Rs. 4 Lakh, you may find fewer options in the 2024-2025 model year range compared to older vintages.
Best Value Picks Right Now: 2022-2023 model year sedans like the Honda City and Hyundai Verna offer the best value in the used market. With sedan demand soft in the new market, depreciation on these models has been steeper than SUVs — meaning buyers get more car for less money.
For sellers looking to upgrade, the February sales numbers indicate healthy dealer inventory levels. This means you are more likely to get attractive exchange offers and financing deals, especially during the March year-end sale period. Many dealers are offering exchange bonuses of Rs. 15,000-30,000 on top of the used car valuation for popular models.
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Electric Vehicle Trends and Market Share
The electric vehicle segment contributed approximately 35,500 units in February 2026, maintaining a 10% share of total passenger vehicle sales. While the growth rate has moderated compared to the explosive 80-100% jumps seen in 2024, the absolute numbers continue to climb. The EV ecosystem — charging infrastructure, battery costs, and consumer awareness — is maturing steadily.
| EV Model | Feb 2026 Est. Units | Market Share (EV Segment) |
|---|---|---|
| Tata Nexon EV | 5,200 | 14.6% |
| Tata Punch EV | 4,800 | 13.5% |
| Tata Tiago EV | 2,500 | 7.0% |
| Hyundai Creta EV | 3,200 | 9.0% |
| MG ZS EV / Comet | 2,800 | 7.9% |
| Mahindra XUV400 EV | 2,100 | 5.9% |
| Others (BYD, BMW, etc.) | 14,900 | 42.1% |
Tata Motors continues to dominate the EV space with a combined 35% market share across the Nexon EV, Punch EV, and Tiago EV. The Hyundai Creta EV, launched in late 2025, has ramped up quickly and is already the fourth best-selling EV in the country. Its 473 km range and competitive pricing of Rs. 17.99-24.99 Lakh have made it a strong contender.
For the used EV market, this growing new EV sales volume is laying the foundation for a robust secondary market by 2027-2028. Early adopters of the Nexon EV (2020-2022 models) are already listing their vehicles on platforms like VahanBazaar, with prices ranging from Rs. 8-12 Lakh depending on battery health and kilometres driven. As the new EV pipeline grows, expect used EV prices to become increasingly attractive.
Outlook for March 2026 and FY27
March is historically the biggest month for Indian auto sales, driven by year-end discounts, corporate purchases, and the auspicious buying season around Gudi Padwa and Ugadi. Industry analysts expect March 2026 to be exceptional, with total PV wholesales potentially crossing 4 Lakh units for the first time.
Looking ahead to FY27 (April 2026 onwards), the outlook remains cautiously optimistic. SIAM has projected 5-7% growth in passenger vehicle sales, translating to a total market of approximately 44-45 Lakh units. Key factors to watch include the trajectory of crude oil prices (which impacts fuel costs and consumer sentiment), the pace of EV infrastructure rollout, and the impact of any new emission or safety regulations.
Upcoming Regulatory Change: The proposed CAFE III (Corporate Average Fuel Economy) norms, expected to be finalised by mid-2026, could push manufacturers to accelerate their EV and hybrid strategies. This may result in more aggressive pricing on EVs and mild-hybrid variants across the market.
For car buyers, the message is clear: whether you are buying new or used, the Indian auto market is offering more choice, better technology, and increasingly competitive pricing. The strong February numbers reflect genuine demand, and both primary and secondary car markets stand to benefit from this sustained momentum. If you are planning to buy or sell, the coming weeks leading into the new financial year represent an excellent window of opportunity.
Planning to Sell Your Car? The March year-end rush means peak demand from dealers and individual buyers alike. List your car on VahanBazaar now to take advantage of the seasonal demand surge and get the best price for your vehicle.
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Frequently Asked Questions
Multiple factors drove the 7.3% growth: strong rural recovery after a good monsoon season, over 15 new model launches in Q4 FY26, stable auto loan interest rates around 8.5-9.5%, the pre-March year-end inventory buildup by dealers, and rising household incomes pushing more families into the car-buying bracket. The expanding highway network also made car ownership more practical in smaller towns.
Tata Motors led the growth charts with an impressive 33.7% year-over-year increase, dispatching approximately 52,500 units. This was driven primarily by strong demand for the Nexon, Punch, and the refreshed Harrier-Safari duo. Tata's EV lineup also contributed nearly 7,000 units, the highest-ever monthly EV figure for any Indian manufacturer.
Higher new car sales increase the supply of pre-owned vehicles within 12-24 months as owners trade in or upgrade. This means more choice and potentially better prices for used car buyers in 2027-2028. Currently, popular models like the Creta and Nexon hold strong resale values at 65-75% of ex-showroom price for 2-4 year old units. Sedan buyers benefit most, as softer new sedan demand leads to steeper depreciation.
Electric vehicles accounted for approximately 10% of total passenger vehicle sales in February 2026, with around 35,500 units dispatched. Tata Motors leads with over 35% of the EV segment through the Nexon EV, Punch EV, and Tiago EV. Hyundai's Creta EV has emerged as a strong challenger since its late-2025 launch. The EV ecosystem is maturing, though growth has moderated from the 80-100% jumps of 2024.
Yes, March is traditionally one of the best months for both buying and selling used cars. Dealers offer exchange bonuses of Rs. 15,000-30,000 to clear inventory before the financial year-end, benefiting sellers who upgrade. Buyers benefit from the increased supply of trade-ins entering the used market. If you are selling, listing now captures peak seasonal demand. If buying, you will find more options and motivated sellers.