Automobile retail sales in India rose by 9 per cent in August aided by sales growth in all segments, including passenger vehicles and two wheelers, dealers' body FADA said on Tuesday.

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The total retail sales across segments rose to 18,18,647 units last month, up 9 per cent, from 16,74,162 units in August 2022.

Passenger vehicle registrations increased by 7 per cent to 3,15,153 units last month from 2,95,842 units in August 2022.

"In the passenger vehicle segment, improved vehicle supply, bolstered by expanded customer schemes, has maintained positive market dynamics," the Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in a statement.

Similarly, two-wheeler sales saw a jump of 6 per cent to 12,54,444 units as compared with 11,80,230 units in the same month last year.

"Despite positive growth, consumer sentiment remained ambivalent, impacting conversion rates and intensifying competition among key players," Singhania noted.

Commercial vehicle registrations increased by 3 per cent to 75,294 units last month from 72,940 units in the same month last year.

Tractor sales jumped 14 per cent to 73,849 units in August as against 65,018 units in the year-ago period.

Three-wheeler retail sales saw a jump of 66 per cent to 99,907 units in August from 60,132 units in August 2022.

"As the Indian automobile industry enters September, the outlook remains cautiously optimistic, shaped by a multitude of factors that vary across vehicle segments," Singhania said.

The onset of the festive season, beginning with Onam, has uplifted market mood, improved liquidity and eased earlier bottlenecks in the supply chain across all categories, he added.

Lack of sufficient rainfall could precipitate a rise in inflation, adversely affecting consumer purchasing power and diminishing demand, Singhania stated.

This meteorological shortfall would not only jeopardise the yield of the ongoing kharif crops but also cast a shadow on the subsequent sowing season for rabi crops, he added.

"Such developments would be particularly inopportune as they would coincide with the peak of India's festive season, notably Navratri and Deepawali, traditionally periods of heightened consumer activity," Singhania said.

FADA said it collated vehicle data for August from 1,352 out of 1,438 RTOs (regional transport offices) across the country.