Hyundai Behind Tata Motors and M&M for the Third Month in a Row

India’s passenger vehicle (PV) market has witnessed a significant reshuffling in its competitive hierarchy, with Hyundai Motor India Ltd (HMIL) experiencing a concerning decline in its market position. Once firmly established as the second-largest automaker in India, Hyundai has now slipped to fourth place for three consecutive months, trailing behind Maruti Suzuki, Tata Motors, and Mahindra & Mahindra. An analysis of the latest sales data from the Federation of Automobile Dealers Associations (FADA) provides valuable insights into this evolving market dynamic.

Current Market Position

According to FADA’s April 2025 retail data, Hyundai secured a market share of 12.47%, representing a substantial contraction from the 14.29% it commanded in April 2024. This 1.82 percentage point decrease is particularly notable when compared to the performance of its closest competitors:

• Market leader Maruti Suzuki maintained its dominant position with 39.44% market share, though this also represented a marginal decline from 40.39% in the previous year.
• Mahindra & Mahindra significantly strengthened its position, capturing 13.83% of the market, up from 11.23% a year earlier—a remarkable 2.6 percentage point improvement.
• Tata Motors holds 12.59% market share, down slightly from 13.61% in April 2024.

In absolute numbers, Hyundai retailed 43,642 vehicles in April 2025, a significant 11.37% decline from the 49,243 units sold in April 2024. This contrasts sharply with Mahindra’s performance, which registered 48,405 vehicles—an impressive 25.09% growth over the 38,696 units from the same period last year.

A Consistent Downward Trend

The April figures confirm a troubling pattern for Hyundai. In February and March 2025, Hyundai ranked fourth in retail sales, falling behind Tata Motors and Mahindra & Mahindra. In March 2025, FADA figures show Hyundai retailed 42,511 units, placing it behind market leader Maruti Suzuki, Tata Motors (48,462 units), and Mahindra & Mahindra (46,297 units). 

Key Factors Behind the Decline

Several interrelated factors appear to be contributing to Hyundai’s diminishing market position:

 Intensified Competition 

The primary factor appears to be the relentless competitive pressure, particularly from Tata Motors and Mahindra & Mahindra. Tata Motors has aggressively expanded and refreshed its portfolio, especially in the high-growth SUV segment (Nexon, Punch, Harrier, Safari) and has established a dominant position in the electric vehicle (EV) market. Similarly, Mahindra & Mahindra continues its strong run, primarily driven by its popular SUV lineup, including the Scorpio-N, XUV700, and Thar—which have long waiting periods and command significant market presence.

Product Portfolio Challenges

While Hyundai’s products are often seen as practical and feature-rich, they appear to lack the excitement and emotional appeal that many car buyers now seek. In contrast, competitors like Mahindra have been successful with models that are perceived as more adventurous and distinctive. The timing of model refreshes is also critical—while Hyundai has updated models like the Creta, the sheer number of new, high-demand offerings from rivals, especially in various SUV sub-segments, has impacted Hyundai’s standing.

Segment Gaps and Alternative Powertrains

Hyundai faces notable gaps in key growth segments. The FADA data indicates growing consumer interest in alternative powertrains, with petrol/ethanol vehicles declining to 49.97% market share in April 2025 from 53.31% a year earlier. Hyundai’s limited presence in the EV segment—where Tata Motors leads—and its slower response to the hybrid and electric vehicle transition represent missed opportunities to attract environmentally conscious buyers.

Rural Market Dynamics

The FADA data reveals stronger PV growth in rural markets compared to urban centers. For April 2025, rural PV sales grew by 5.03% year-over-year, while urban sales actually contracted by 0.52%. This rural emphasis may favor competitors with stronger rural distribution networks and product offerings tailored to those environments.

Strategic Implications for Hyundai

This sustained decline in market position presents several strategic challenges for Hyundai:

Brand Perception: The company’s longstanding position as India’s second-largest carmaker has been central to its premium positioning in the market. Losing this status could potentially impact consumer perception of the brand.

Dealer Network Confidence: With industry-wide inventory concerns persisting (FADA continues to advocate for a 21-day inventory norm versus Hyundai’s apparent 50+ days), excessive inventory buildup could strain relationships with its dealer network.

Investment Allocation: Despite raising Rs 27,870.16 crores in its IPO last year, Hyundai now faces critical decisions about how to deploy this capital most effectively to address competitive weaknesses.

Path to Recovery

As Hyundai navigates these challenges, several strategic approaches could help the company reclaim its traditional market position:

Product Excitement: Hyundai could take inspiration from sister brand Kia, which has been more successful in keeping its lineup exciting and fresh with models like the Seltos and Carens. Kia’s willingness to take risks and launch innovative products offers valuable lessons for Hyundai.

EV and Alternative Powertrain Strategy: Accelerating its EV development and expanding hybrid offerings would address a significant competitive gap relative to Tata Motors and align with shifting consumer preferences.

Inventory Discipline: Better alignment between production and actual retail demand could improve dealer economics and reduce the need for margin-eroding discounts.

Rural Market Focus: Developing a more targeted approach to India’s growing rural market represents a significant opportunity for Hyundai to counter competitors’ strengths and leverage the broader industry trend toward rural growth.

Hyundai’s slide to fourth position in India’s passenger vehicle market represents a significant challenge to its long-established market position. While the company’s recent IPO success reflects long-term investor confidence, the immediate retail sales performance suggests structural competitive challenges that require strategic attention.

For Hyundai, reclaiming its traditional market position will require not only tactical responses to immediate competitive pressures but a strategic reassessment of its product portfolio, market positioning, and distribution approach in a rapidly evolving automotive ecosystem. The coming quarters will be critical in determining whether this market position erosion represents a temporary deviation or a more fundamental shift in India’s automotive hierarchy.

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