Construction Equipment (CE) was the sole segment to post negative growth in February 2026, retailing 6,721 units against 6,804 units in the same month last year, a decline of 1.22% year-on-year. On a month-on-month basis, CE also fell 1.65% from January 2026's 6,834 units, continuing a pattern of modest softness in the segment. Urban CE retail dropped 4.52% YoY while rural CE edged marginally higher by 1.57% YoY, suggesting that whatever limited support existed in the segment came from non-urban areas. CE was the only category that did not set a new February record, standing in contrast to the broad-based strength seen across the rest of the market.

Fuel-mix data shows diesel retained near-total dominance in the CE segment, accounting for 100% of retail in February 2026, consistent with January 2026 and broadly in line with February 2025 figures of 99.04%. The negligible presence of alternative fuels — CNG, petrol/ethanol, and electric — reflects the segment's continued dependence on diesel-powered machinery, a trend that has remained largely unchanged over the tracked period.

In terms of OEM market share, JCB India Limited led the CE segment with 3,377 units, accounting for 50.25% of retail — a notable increase from 46.30% a year earlier, suggesting consolidation at the top of the market. Action Construction Equipment followed at 10.40% share with 699 units, though its share declined from 12.49% in February 2025.

Ajax Engineering held third position with 470 units and a 6.99% share, nearly unchanged from 6.89% a year ago. Escorts Kubota followed with 443 units at 6.59%, while Bull Machines recorded 223 units at 3.32%, up from 2.63% in February 2025. Case New Holland, Tata Hitachi, Caterpillar India, Schwing Stetter, and Wirtgen India each held between 1% and 3% of the market. Others, including smaller OEMs, held a combined 10.47% share, down sharply from 13.24% a year earlier, indicating a shift in retail towards established players.

The Federation of Automobile Dealers Associations (FADA) released the February 2026 Vehicle Retail Data on 5 March 2026, in collaboration with the Ministry of Road Transport and Highways, Government of India. The data was gathered from 1,459 out of 1,464 RTOs across the country. Figures from Telangana are not included in the dataset.

Against this backdrop of CE underperformance, the broader auto retail market delivered its strongest-ever February performance. Overall retail across all segments stood at 24,09,362 units in February 2026, compared to 19,17,934 units in February 2025 — a growth of 25.62% YoY. Despite February being a shorter month than January, total retail declined only 11.50% month-on-month from January 2026's 27,22,558 units, which is typical of seasonal patterns.

Two-Wheelers led volumes at 17,00,505 units, up 25.02% YoY, with urban markets growing 28.96% and rural markets rising 22.16%. FADA noted that improved rural liquidity following good crop outcomes, attractive marketing schemes, better affordability post GST revisions, and the ongoing marriage season contributed to the strong performance. Some regions, however, reported supply constraints in select models and the impact of board examinations tempering momentum slightly.

Passenger Vehicles retailed 3,94,768 units, registering 26.12% YoY growth. Rural markets surged 34.21% YoY, outpacing urban growth of 21.12%, with rural recovery also supporting demand for smaller cars even as SUVs and utility vehicles continued to drive overall volumes. PV inventory levels further reduced to 27–29 days, moving closer to FADA's recommended 21-day benchmark, indicating improved alignment between wholesale dispatches and retail demand.

Commercial Vehicles posted 1,00,820 units, growing 28.89% YoY, supported by freight movement, e-commerce activity and infrastructure-linked demand. Within CVs, Medium Commercial Vehicles saw the highest sub-segment growth at 39.54% YoY, while Heavy Commercial Vehicles grew 34.74% YoY. Three-Wheelers retailed 1,17,130 units, up 24.39% YoY, with the Three-Wheeler Passenger sub-category growing 36.01% and Three-Wheeler Personal use growing 50.70% — albeit off a small base.

Tractors were the fastest-growing segment in February 2026, recording 89,418 units, a sharp 36.35% increase over the 65,579 units sold in February 2025. Mahindra & Mahindra Limited, including its Swaraj Division, dominated the segment with a combined share of around 43%, followed by International Tractors Limited at 12.93% and Escorts Kubota at 11.32%.

On a financial year-to-date basis (April 2025 to February 2026), total retail stood at 2,69,52,913 units, up 12.13% over 2,40,38,020 units in the same period of FY25. Tractors led YTD growth at 19.66%, followed by Two-Wheelers at 12.00%, Passenger Vehicles at 11.82%, Three-Wheelers at 11.78%, and Commercial Vehicles at 11.34%. CE was the only segment to post a YTD decline, falling 11.38% to 64,176 units from 72,418 units in the year-ago period.

FADA attributed the month's overall performance to improved market sentiment following the GST 2.0 announcement, rural demand recovery, the marriage season, and new product introductions. FADA President Mr. C S Vigneshwar noted that five out of six categories registered their highest-ever February retail volumes, reflecting the strength of underlying demand in the market.

Looking ahead, dealer sentiment for March 2026 remains broadly positive. According to FADA's online member survey, 75.51% of dealers expect growth in March, 19.90% foresee a stable market, and only 4.59% anticipate a decline. Demand in March is expected to be supported by multiple festivals including Navratri, Ramzan, Ugadi, Gudi Padwa and Eid, alongside the financial year-end buying cycle. Supply constraints in certain models and evolving global geopolitical developments were flagged as factors to monitor.

For the March–May 2026 period, 67.35% of dealers expect growth, a step down from the 79.70% who had expressed similar confidence in the January survey for the February–April period. FADA interpreted this as the market transitioning from a phase of sharp post-GST rebound to a more stable and calibrated growth trajectory. On dealer liquidity, 54.59% rated conditions as good, 34.69% as neutral, and 10.71% as poor. Sentiment readings were similar, with 58.67% reporting good sentiment, 31.12% neutral, and 10.20% poor.