India Car & Two-Wheeler Segment Report July 2026

Passenger Vehicles and Two-Wheelers are the two segments that shape most Indian buyers’ everyday decisions, and in July 2026 both posted their best-ever July on record, according to Vehicle Retail Data released by the Federation of Automobile Dealers Associations (FADA). Two-Wheeler retail crossed 18 lakh units in a July for the first time. Passenger Vehicle retail crossed 4 lakh units in a July for the first time. This report narrows Techy Trends’s Segment Intelligence coverage specifically to these two categories, breaking each down by ICE versus EV performance and by OEM-level market share movement.

Two-Wheelers: 18,18,289 units, +28.25% YoY, -1.26% MoM

Two-Wheeler retail stood at 18,18,289 units in July 2026, up 28.25% year-on-year but down 1.26% against a strong June, as the segment’s best-ever July still cooled slightly on a sequential basis. Rural retail (+28.59% YoY) marginally outpaced Urban (+27.86% YoY), but the month-on-month picture diverged sharply: Urban 2W rose 5.04% MoM while Rural fell 6.16% MoM, as erratic monsoon rainfall, flooding across western and central India, and the Aadi/Shravan inauspicious buying window in the south kept rural footfall subdued even as urban demand held firm. FADA also flagged short supplies of high-demand models leaving bookings pending in the segment, a supply constraint rather than a demand shortfall.

Four months into FY27, cumulative Two-Wheeler retail stands at 75,11,630 units, up 17.51% year-on-year against 63,92,063 units in the same period of FY26.

Two-Wheeler Fuel Mix: ICE vs EV

Petrol/ethanol remains overwhelmingly dominant in Two-Wheelers, but its share has steadily eroded, falling from 92.07% a year ago to 88.67% in July 2026. EV retail share hit a record 11.24% of the segment, up from 7.65% a year earlier and 10.59% just a month earlier, meaning roughly one in nine two-wheelers retailed in July was electric. CNG/LPG remains a negligible presence in this segment at under 0.1% share.

Two-Wheeler OEM Market Share, July 2026 vs July 2025

Honda Motorcycle & Scooter India held onto the top spot in July 2026 with 25.83% share, essentially flat versus 25.77% a year earlier. TVS Motor Company was the strongest gainer among the volume leaders, rising to 20.58% share from 19.77%, while Bajaj Auto and Suzuki Motorcycle India both lost share despite growing in absolute units, retail growth that didn’t keep pace with the segment’s overall 28.25% expansion.

The more interesting split is within the dedicated EV two-wheeler makers. Ather Energy nearly doubled its retail volume to 30,357 units from 17,834 a year earlier, lifting its share to 1.67% from 1.26%. Ola Electric moved in the opposite direction entirely, retail volume fell to 14,106 units from 18,450 a year ago, a 23.5% decline, and its share slipped to 0.78% from 1.30%, even as the overall 2W EV category grew sharply. Greaves Electric Mobility more than doubled its volume to 10,125 units and lifted its share to 0.56% from 0.30%. In other words, the two-wheeler EV growth story in July 2026 was real, but it wasn’t evenly shared, Ather and Greaves gained ground while the segment’s early leader, Ola Electric, lost both volume and share.

Passenger Vehicles: 4,16,555 units, +19.13% YoY, -1.68% MoM

Passenger Vehicle retail came in at 4,16,555 units in July 2026, up 19.13% year-on-year and down 1.68% month-on-month, the segment’s first-ever July above the 4-lakh mark. Rural PV retail grew 24.72% YoY, comfortably outpacing Urban’s 15.76% YoY, continuing a broadening of PV demand beyond metro markets that FADA has flagged in recent months. Roughly 44% of PV dealers said OEM schemes directly supported July bookings.

Four months into FY27, cumulative PV retail stands at 16,87,040 units, up 22.80% year-on-year against 13,73,821 units in the same period of FY26, making Passenger Vehicles one of the fastest-growing major categories on a YTD basis.

Passenger Vehicle Fuel Mix: ICE vs EV vs Alternative Fuels

This is where the month’s most significant fuel-mix story sits. Petrol/ethanol’s share of PV retail fell to 41.68% in July 2026 from 47.62% a year earlier, a drop of nearly six percentage points. Combined, CNG, Hybrid and EV, treated together as alternative fuels, reached 40.59% of PV retail, leaving petrol ahead by just 1.09 percentage points, down from a 13.21-point gap in July 2025. EV alone nearly reached 7.90% share, up from 5.14% a year ago. FADA read this as a potential setup for a historic crossover between petrol and alternative fuels in PV within the coming months, with consumer hesitation around the E20 fuel transition specifically pushing some buyers toward CNG, hybrid and EV options rather than away from car purchases altogether. Diesel’s share held broadly flat at 17.73%.

Passenger Vehicle OEM Market Share, July 2026 vs July 2025

Maruti Suzuki India retained comfortable market leadership at 38.86% share, essentially unchanged from 38.67% a year earlier. Below the leader, the PV market share story splits cleanly into gainers and losers. Tata Motors was the standout, retailing 58,774 units against 42,950 a year earlier, a share gain of nearly 1.8 percentage points to 14.11%. Mahindra & Mahindra grew both volume and share modestly, to 13.50% from 13.00%.

Hyundai Motor India illustrates why sales growth and market share must be tracked separately rather than treated as interchangeable: its retail volume actually rose, from 45,278 to 47,853 units, yet its market share fell from 12.95% to 11.49%, because the overall PV market grew faster than Hyundai did. Toyota Kirloskar Motor and Skoda Auto Volkswagen Group show the same pattern, both grew in absolute units but lost share as faster-growing rivals expanded the market around them.

Inventory Signal

PV dealer inventory rose by another day over June-end to a range of 33–35 days, well above FADA’s recommended 21-day benchmark. With festive-season stocking now beginning, about half of PV dealers already reported higher inventory levels, and roughly a quarter said they were carrying more than 25% aged stock. FADA’s explicit call to PV OEMs is to align dispatches strictly with retail pace so dealer capital isn’t trapped in unsold inventory heading into the festive season, a signal worth watching closely given how directly it can translate into discounting pressure in August and September.

What the ICE-vs-EV Split Means for Buyers

Two-Wheelers and Passenger Vehicles are moving toward electrification at very different speeds. In Two-Wheelers, EV retail share is at a record 11.24%, still a clear minority but growing quickly and now backed by a maturing set of dedicated EV makers, Ather and Greaves both gained share this month, though Ola Electric’s decline shows that early-mover status in 2W EVs isn’t guaranteed to hold. In Passenger Vehicles, the more immediate story isn’t EV in isolation but the combined alternative-fuel category, CNG, Hybrid and EV together are now retailing at near-parity with petrol, a shift buyers weighing their next car purchase should treat as mainstream rather than niche.

For dealers, the actionable read is narrower: PV inventory discipline through the festive season matters more right now than the fuel-mix trend, since elevated stock levels are the more immediate risk to dealer economics over the next two to three months.

Frequently Asked Questions