Moneycontrol Pro Panorama | The changing pecking order in India’s passenger vehicle market

Changing market preferences have triggered a strategy rejig among passenger vehicle makers. (Representative image)

Dear Reader,

Mahindra & Mahindra (M&M) is exiting the year 2025 on a high note. The company’s passenger vehicle wholesale dispatches in India surpassed Hyundai Motor India and Tata Motors Passenger Vehicles in the current fiscal year till November 2025. Analysts expect M&M to maintain positive momentum in monthly sales in December 2025. This makes M&M the second largest company in India’s passenger vehicle market. Remarkable, for a company that only sells utility vehicles. In FY25, Hyundai was the second largest passenger vehicle company in India by wholesale volumes.

M&M’s decision to focus only on utility vehicles and continue diesel offerings amid changing emission norms have paid off handsomely. Market leader Maruti Suzuki’s decision to discontinue diesel offerings is feared to have cost the company some sales and market share.

M&M exited the relatively low-priced compact vehicles and passenger cars market to focus on utility vehicles. In hindsight, that decision proved right as the Indian market increasingly moved towards utility vehicles.

The share of utility vehicles in total passenger vehicle sales in India more than doubled between FY19 and the current fiscal till November 2025. Utility vehicles now dominate passenger vehicle sales in India.

“M&M has significantly strengthened its position in the SUV category, expanding its revenue market share to 26.4 percent in H1 FY26 from a low of 13.6 percent in FY21,” analysts at Motilal Oswal said in a note. Success of new products has helped M&M gain market share. Note that sports utility vehicles are relatively priced higher than hatchbacks and compact cars.

These changing market preferences have triggered a strategy rejig among passenger vehicle makers. Many have exited low-priced hatchbacks and small cars in India over the last several years.

While M&M’s performance over the last several years should please investors, one should note that competition in the domestic market remains high.

The recently launched vehicle (Sierra) by Tata Motors received good reviews and can help the company gain volumes in India. Also, Hyundai is plotting a comeback, lining up new products and investments. Therefore, while M&M has had a good run in recent years, it cannot rest easy. The pecking order can change. Not surprisingly, M&M too has new launches in the pipeline.

The increased focus from M&M, Tata Motors, Hyundai can raise competition for Maruti Suzuki also. That makes India automobiles an interesting sector to watch in 2026, as investors will attempt to gauge who will win and who will lose in this high-stakes race.

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