New Delhi: May's fuel price hikes triggered a visible shift in buyer interest toward fuel-efficient and alternative-powertrain vehicles, with the electric two-wheeler share climbing to 9.25 percent from 6.11 percent a year earlier, even as overall automobile retail sales touched a record, the Federation of Automobile Dealers Associations (FADA) said on Monday.
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Total retail sales rose 9.55 percent year-on-year to a record 25,31,067 units in May, from 23,10,451 units in the same month last year — a performance FADA said held up despite the fuel-price revision, heatwave conditions and the West Asia conflict.
FADA said dealers reported a clear rise in enquiries for fuel-efficient and alternative-powertrain options following the May fuel-price revision. "A notable feature of the month was the consumer response to the May fuel-price revision: dealers reported a visible rise in enquiries for fuel-efficient and alternative-powertrain options, reflected in the 2W EV share climbing to 9.25 percent from 6.11 percent a year ago," FADA stated.
The month marked an all-time best May for three-wheelers, passenger vehicles and tractors — a strong showing in what is usually a lean month. Passenger vehicle (PV) retail sales hit a record 4,02,591 units, up 23.25 percent from 3,26,656 units in May 2025. Two-wheeler sales clocked their best-ever monthly tally at 18,44,947 units, a rise of 7.54 percent from 17,15,581 units a year ago. Three-wheeler sales rose 3.56 percent to 1,11,526 units, from 1,07,688 units in May 2025, while commercial vehicle (CV) sales grew 5.29 percent to a record 83,823 units, from 79,614 units a year earlier.
Dealer confidence for the June-to-August period firmed up, with 59.07 percent now expecting growth — an improvement FADA said signals greater conviction in medium-term demand as the monsoon advances. The body said dealers expect the seasonal lull to give way to a stronger rural income cycle once Kharif sowing gathers pace.
For two-wheelers, FADA expects support from improving rural sentiment, healthy farm cash flows through the sowing season, and the continued shift to fuel-efficient and alternative-powertrain models. Passenger vehicle demand is likely to stay steady ahead of the festive build-up, aided by new launches and a broadening "Bharat" demand base. For commercial vehicles, FADA said sentiment remains constructive on economic activity, goods movement and infrastructure-linked demand, though financing turnaround time and the West Asia situation remain key monitorables.
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"Overall, the next three months appear to be Cautiously Optimistic -- with a tad below normal monsoon, the firm 7.7 percent FY26 GDP print and broad policy continuity providing a supportive backdrop, the industry looks set to move from a seasonally soft patch towards a firmer second-quarter footing," FADA said.