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The Print Times
Industry Overview and Annual Summary
India retained its position as the third-largest passenger vehicle (PV) market globally, with sales of around 4.7 million units in FY 2025-26, registering a growth of around 8% y-o-y over FY 2024-25.
However, the yearly growth figure does not convey the underlying demand environment that prevailed over the entire year. FY 2025-26 can be best described as a ‘year of two halves’. The year started with a subdued demand environment, leading to a decline of 0.4% y-o-y in the first half, followed by a sharp recovery, with growth accelerating to 16.7% y-o-y in the second half. Recovery in the second half was aided by GST reforms, which revived demand in the small car segment, falling under the lower 18% GST bracket. Such a meaningful reduction in indirect taxes in a single stroke is relatively uncommon.
Since FY 2018-19, the small car segment, especially entry-level cars, has witnessed significant contraction in demand, due to price increases driven mainly by regulatory changes. As a result, a significant portion of customers who traditionally opted for entry-level cars were priced out of the market. This structural shift constrained overall industry growth, which grew below its potential at around 4.3% CAGR between FY 2018-19 and FY 2024-25. The demand expansion largely concentrated in higher-priced segments.
The GST reform acted as a key inflection point, improving affordability and triggering a revival in demand, especially for small cars. This recovery is significant, given the segment’s critical role in driving first time buyers and expanding overall market size. While the recovery in small cars supported broader demand revival, SUVs continued to support industry growth, maintaining a dominant share of overall PV sales. SUVs continued to account for over 56% of PV sales.
At the same time, the shift in consumer preference continued towards cleaner powertrain technologies such as Compressed Natural Gas (CNG) vehicles, Strong Hybrid Electric Vehicles (SHEVs) and Battery Electric Vehicles (BEVs), leading to a growth in sales of vehicles belonging to these technologies in FY 2025-26 over the previous year. Consequently, the share of sales of CNG vehicles, SHEVs and BEVs in total PV sales increased to 28.9% in FY 2025-26 compared to 24.4% in FY 2024-25.
In FY 2025-26, Maruti achieved key milestones, and total sales reached an all-time high of 2,422,713 units, surpassing 2 million for the third consecutive year. Export volumes hit a record 447,774 units. The production volume reached a historic high of 2,347,792 units for the year.
With the recovery in domestic demand following the GST reforms, Maruti Suzuki operated at nearly full capacity utilisation during the second half of FY 2025-26. While geopolitical developments resulted in supply and cost-related pressures, the Company ensured supply continuity through meticulous planning and close coordination with stakeholders, albeit at elevated costs. Capacity constraints, however, limited the Company’s ability to serve customer demand on time, prompting an acceleration of capacity expansion plans.
In FY 2025-26, Maruti’s retail market share was about 40%. In terms of segmental market share, the Company maintains a leadership position across almost all the product segments and is within close reach of the leadership position in the SUV category. Going forward, with a strong product lineup in SUVs, the Company is striving to achieve a leadership position in this segment as well.
