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Automobile Desk: The Indian automobile market is undergoing a historic transformation. The country’s car buyers are increasingly shifting their preferences from traditional petrol-diesel vehicles to more environmentally friendly and cost-effective alternatives. The July 2026 report released by the Federation of Automobile Dealers Associations (FADA) clearly indicates that the combined market share of CNG, hybrid, and electric vehicles now stands almost equal to that of petrol vehicles.

Looking at the latest data, the share of alternative fuel vehicles (CNG, hybrid, and EVs) in total passenger vehicle sales in July increased to 40.59 percent. In comparison, petrol vehicles recorded a market share of 41.68 percent. This small difference of just 1.09 percent proves that Indian customers are now prioritizing new and efficient fuel options. Just a year ago, there was a huge gap of about 13.21 percent between these two categories, which has now almost disappeared.

​CNG emerged as the most popular choice in the alternative fuel category, capturing 24.67 percent of the market. Hybrid vehicles followed with an 8.02 percent share, while fully electric vehicles (EVs) made a strong presence at 7.90 percent.

This growth is not limited to the passenger vehicle segment only, but the month of July has proved to be historic for the entire auto retail sector. During this period, a total of 25,91,138 vehicles were sold across the country, which shows a tremendous growth of 25.89 percent compared to the same period last year. This is the first time in the history of auto, when all the six main categories like two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, tractors and construction equipment have given their best ever performance in the month of July.

Two-wheeler sales in July reached 1,818,289 units, a 28.25 percent increase over the previous year. The passenger vehicle segment also made history, surpassing the 400,000 mark for the first time in July, with a total of 416,555 vehicles sold. Commercial vehicle sales increased to 99,666 units, while demand for agricultural and construction vehicles also saw a significant surge.

Several key factors are driving this unprecedented market boom. According to Sai Giridhar, Vice President of FADA, the reduction in vehicle prices due to the recently implemented GST 2.0 rates, ease of financing procedures, and the initial buzz of the upcoming festive season have fueled this growth.

Auto dealers are very excited about the coming months. In the FADA survey, about 74.30 percent dealers have expressed hope of better sales in the month of August, while 87.85 percent dealers believe that the three-month festive period between August and October will be very beneficial for the auto industry. Festivals like Independence Day, Rakshabandhan and Onam along with better monsoon across the country have strengthened the rural economy, which is giving new energy to the auto market. An overall growth of 18.27 percent has been registered in the first four months of the current financial year 2026-27, which is the strongest start in the history of the Indian auto retail sector.