India's passenger vehicle market reached a record of four point seven million (mn) units in fiscal year 2025-26, driven by the implementation of GST two point zero in September 2025 and strong performances from leading automakers. The year unfolded as two halves with a weak first half followed by a robust rebound in the second after the GST rate reduction acted as a demand unlock. Industry observers attributed the surge to policy tailwinds and a buoyant festive season.

Maruti Suzuki recorded its highest ever annual sales at two point four two mn units, up from two point two two mn the year before, reflecting sustained demand across segments. The company attributed supportive factors to income tax rebates and a repo rate cut by the Reserve Bank of India, while noting that rising commodity costs may force selective price increases. Price sensitive segments such as small cars could therefore face headwinds if costs are passed on.

Tata Motors Passenger Vehicles reported annual volumes of zero point six four mn units, registering industry beating growth of 15 per cent year on year and moving to the number two position in the second half. Mahindra & Mahindra posted zero point six six mn units, a 20 per cent increase and its highest ever volumes in SUVs and light commercial vehicles. The industry is expected to see growth led by SUVs, CNG models and electric vehicles, although firms are monitoring geopolitical developments for supply risks.

Other manufacturers also recorded gains, with Toyota at zero point four one mn units and Hyundai reporting zero point two one mn units in the January to March quarter while achieving a quarterly peak of zero point one seven mn in Q4. Kia reported its strongest quarter at zero point zero eight mn units and Skoda posted zero point zero two mn units, delivering year on year growth. Companies cautioned that commodity price inflation and external risks could prompt price adjustments that may moderate demand, but the sector aims to carry momentum into FY27, managing cost and supply pressures.