India's Auto Retail Hits Record in February 2026, Led by Tractor Surge

Tractor retail in India rose to 89,418 units in February 2026, up from 65,579 units in February 2025, marking the fastest growth rate among all vehicle categories during the month. The performance was particularly notable given that February is a shorter month, making the volume figures more significant on a per-day basis. On a month-on-month basis, sales declined 22.08% from January's 1,14,759 units, a pattern that analysts consider consistent with seasonal variation rather than a structural slowdown.

Rural markets, which have historically driven tractor demand in India, continued to dominate, accounting for over 82% of total tractor retail in February 2026. Rural tractor sales grew 37.68% year-on-year, outpacing urban market growth of 30.55%. This rural strength has been a consistent theme across recent months, supported by favorable agricultural conditions, including good crop outcomes in the kharif and rabi seasons, which have improved farm income and, in turn, purchasing capacity among rural households.

Diesel-powered tractors continued to account for virtually the entire segment at 99.99% of retail volume, reflecting the near-total absence of alternative fuel adoption in this category. This stands in contrast to passenger vehicles and two-wheelers, where electric and CNG variants are gaining a measurable share of the market.

In terms of manufacturer performance, Mahindra & Mahindra retained its dominant position in the tractor segment in February 2026. Its core tractor division sold 21,471 units, holding a 24.01% market share, while its Swaraj division contributed an additional 16,897 units at 18.90%, bringing the combined Mahindra group share to 42.91%. International Tractors Limited, which markets tractors under the Sonalika brand, held the second position with 11,564 units and a 12.93% share. Escorts Kubota's agri machinery group came in third at 10,125 units and 11.32%, followed by TAFE at 8,892 units (9.94%), John Deere India at 6,673 units (7.46%), and Eicher Tractors at 5,546 units (6.20%). CNH Industrial rounded out the named manufacturers with 4,158 units and a 4.65% share.

The year-to-date picture reinforces the strength of the tractor segment. For the period from April 2025 to February 2026, tractor retail stood at 9,67,849 units, representing a 19.66% increase over the 8,08,803 units recorded in the same period the previous financial year. This is the highest YTD growth rate among all vehicle segments tracked by FADA, underscoring the sustained nature of agricultural equipment demand through the current financial year.

FADA President Mr. C S Vigneshwar noted that the broader market performance in February was driven in part by policy-led confidence following the GST 2.0 announcement, which rationalised tax structures across several vehicle categories and improved affordability. In the tractor segment specifically, the combination of improved rural liquidity, better agri-cash flows, and post-harvest purchasing activity created conditions for strong retail momentum. Looking ahead to March 2026, dealers expect continued support from carry-forward bookings and improved rural sentiment, though some flagged concerns around elections in certain states, possible supply-side constraints, and fuel price uncertainty linked to evolving global developments.

The overall vehicle retail picture in February 2026 was broadly positive. Total retail across all segments reached 24,09,362 units, a 25.62% year-on-year increase, surpassing the previous February record set in 2024. Five of the six major categories — two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and tractors — registered their highest-ever February retail volumes. Two-wheelers led by absolute volume at 17,00,505 units, growing 25.02% year-on-year. Passenger vehicles reached 3,94,768 units, up 26.12%, while commercial vehicles grew 28.89% to 1,00,820 units. Three-wheelers rose 24.39% to 1,17,130 units. Construction equipment was the only segment to register a decline, falling 1.22% year-on-year to 6,721 units.

For the near-term outlook, 75.51% of dealers surveyed by FADA expect growth in March 2026, with 19.90% anticipating a stable market and only 4.59% foreseeing a decline. Demand in March is expected to be supported by the confluence of multiple festivals, including Navratri, Ramzan, Ugadi, Gudi Padwa, and Eid, alongside the financial year-end buying cycle, which traditionally accelerates vehicle purchases across segments. Looking further out at the March to May 2026 period, 67.35% of dealers expect growth, down from 79.70% who held that expectation in the previous survey. This moderation suggests that market expectations are gradually normalising after the sharp post-GST 2.0 rebound seen at the start of the calendar year, with the industry appearing to transition from a phase of strong recovery to one of more stable and calibrated growth.

Dealer sentiment on liquidity and business conditions also remained largely constructive in the survey. Some 54.59% of respondents rated liquidity conditions as good, while 58.67% characterised overall sentiment as good. Around 10% of dealers in both categories rated conditions as bad, indicating that the positive trend, while broad-based, is not uniform across all markets and geographies.

FADA, founded in 1964, is the apex national body representing over 15,000 automobile dealerships across India with more than 30,000 outlets, collectively employing around five million people. The retail data for February 2026 was collated in collaboration with the Ministry of Road Transport and Highways, Government of India, and gathered from 1,459 out of 1,464 RTOs nationwide. Figures do not include data from Telangana.