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NEW DELHI — The Indian automobile industry has shifted into high gear, closing the 2025-26 financial year (FY26) with record-breaking domestic sales of approximately 4.7 million units. Driven by a massive surge in SUV demand and the implementation of GST 2.0, the market saw an 8–9% year-on-year growth, solidifying India’s position as a global automotive powerhouse.
While the industry celebrated its best-ever performance, the year marked a significant “changing of the guard” in market rankings, with homegrown giant Mahindra & Mahindra officially overtaking Hyundai Motor India to claim the prestigious number two spot.
The Winners’ Circle: Mahindra and Tata Surge
The star of the fiscal year was undoubtedly Mahindra & Mahindra. Bolstered by an aggressive SUV lineup including the Thar Roxx, Scorpio-N, and the XUV 7XO, Mahindra saw its sales jump nearly 20% to cross the 6.6 lakh unit mark for the first time. This performance pushed them past Hyundai, a position the South Korean automaker had held for nearly three decades.
Tata Motors also enjoyed a stellar year, retaining a fierce competition for the podium. With a 14% growth in domestic volumes (reaching 6.31 lakh units), Tata benefitted from the continued dominance of the Punch and Nexon, alongside a significant 77% growth in its electric vehicle (EV) segment during March alone.
Maruti Suzuki: The Undisputed Leader
Despite the rising competition, Maruti Suzuki remains the king of the road. The company reported its highest-ever annual domestic sales of over 18.23 lakh units. While its growth was a more modest 3.5%, its export performance was the real highlight, surging 34% to 4.47 lakh units despite global geopolitical tensions. The Maruti Dzire stood out as the single highest-selling model in the country for the year.
Hyundai’s Rare Dip
In a surprising turn for the industry, Hyundai Motor India reported a decline of approximately 2% in annual domestic volumes. While the company saw steady growth in specific months, it struggled to keep pace with the aggressive SUV refreshes from Mahindra and Tata, eventually slipping to the third or fourth position depending on the specific monthly fluctuations toward the end of the fiscal year.
Key Growth Drivers
Industry experts attribute this record-breaking year to several pivotal factors:
GST 2.0: Tax rationalization in late 2025 acted as a massive catalyst for mid-segment and small cars.
SUV Dominance: SUVs now account for a staggering 58% of total passenger vehicle sales.
Economic Resilience: Lower repo rates and favorable income tax benefits spurred middle-class spending.
“The passenger vehicle industry has reflected a strong rebound in the second half of the year. We expect to build on this momentum in FY27 with a strong pipeline of new products and a multi-powertrain strategy,” said Shailesh Chandra, MD of Tata Motors Passenger Vehicles.
As the industry looks toward FY27, the focus is expected to shift further toward EV penetration and navigating potential supply chain hurdles arising from international conflicts. For now, however, India’s car makers are basking in the glow of a historic milestone.
