M&M Emerges as the Big Winner in FY25 as Rivals Slip

In a year marked by moderate growth and shifting consumer preferences, Mahindra & Mahindra has emerged as the undisputed star performer in India’s passenger vehicle market, posting a remarkable 19.95% year-on-year growth while industry veterans fought to maintain their positions.

The Federation of Automobile Dealers Associations (FADA) released its comprehensive analysis of the financial year 2024-25 yesterday, revealing that India’s PV market grew by 4.87% overall, with total sales reaching 41.53 million units. However, beneath this headline figure lies a tale of contrasting fortunes among the country’s automotive powerhouses.

David and Goliaths: The Changing Landscape

Maruti Suzuki, the long-standing market leader, managed to hold onto its crown with 16.72 million units sold, representing a 3.95% growth over FY24. Yet, the giant saw its market share slip slightly from 40.60% to 40.25%, suggesting that the competition is gradually chipping away at its dominance.

Maruti’s performance reflects the broader industry challenges. They’re growing, but not as fast as some competitors, particularly in the lucrative SUV segment that now accounts for half of all PV sales in India.

Meanwhile, Hyundai Motor India experienced a surprising setback, with sales dipping to 5.59 million units—a 0.66% decline in a growing market. The Korean manufacturer’s market share contracted more significantly, falling from 14.21% to 13.46%. This decline in a growing market indicates Hyundai may need to recalibrate its product mix and strategy to regain momentum.

Tata Motors, which has been aggressively pushing its electric vehicle strategy, also experienced a slight sales decline of 0.67%, with 5.36 million units sold. Its market share compressed from 13.62% to 12.90%, though it maintained its position as the third-largest PV manufacturer in the country.

Mahindra’s Meteoric Rise: Riding the SUV Wave

Against this backdrop of cautious growth and mild contractions, Mahindra & Mahindra’s performance stands out dramatically. The homegrown automaker saw its sales surge to 5.13 million units, up from 4.27 million in FY24—a growth rate that dwarfed all competitors at 19.95%.

This extraordinary performance has catapulted M&M’s market share from 10.79% to 12.34%, putting it within striking distance of overtaking Tata Motors for the third position in India’s fiercely competitive PV market.

Mahindra’s success story is intrinsically linked to India’s dramatic shift toward SUVs over the past five years. While traditional hatchbacks and sedans once dominated the landscape, SUVs now represent approximately 50% of all passenger vehicles sold in the country. As a manufacturer that derives nearly 100% of its passenger vehicle sales from utility vehicles, Mahindra has been disproportionately benefited from this fundamental market transformation.

The company’s focus on robust, feature-rich SUVs has clearly resonated with Indian consumers. Their product lineup has perfectly captured the zeitgeist of what today’s buyers want—vehicles that combine practicality with adventure appeal. The company’s recent launches have consistently garnered strong bookings, with waiting periods extending to several months for popular models—a stark contrast to the inventory challenges faced by many competitors.

Rural India Drives Growth

FADA President Mr. C S Vigneshwar highlighted a significant trend in his analysis: “A key highlight this year was the strong performance in rural areas. Passenger Vehicles posted 7.93% in rural sales, compared to 3.07% in cities.”

This rural momentum appears to have particularly benefited Mahindra, whose vehicles have traditionally enjoyed strong appeal in non-urban markets. The company’s dealer network expansion in tier-2 and tier-3 cities has further capitalized on this trend.

 

The Electric Revolution Gathers Pace

The battle for electric vehicle dominance is intensifying, with traditional EV leader Tata Motors seeing its market share in the segment decline significantly—from 70.52% in FY24 to 53.52% in FY25.

Mahindra has been making steady inroads in this space as well, with its EV market share increasing to 7.60% from 6.69% in the previous year. The company’s ambitious plans for new electric model launches suggest this growth trajectory could accelerate further.

What we’re witnessing is a market in transition. The electrification push is creating new opportunities for established players to reset competitive positions that have remained relatively stable for decades.

Storm Clouds on the Horizon: Sustainability Concerns

Despite Mahindra’s impressive performance, serious questions loom about the sustainability of its SUV-focused strategy. The premium SUV segment, which has driven much of the company’s growth, relies heavily on upper-middle-class discretionary spending—a sector that has recently come under significant pressure.

The Indian stock market has experienced a substantial correction in recent weeks, erasing significant wealth from retail investors. This capital market downturn threatens to dampen consumer sentiment, particularly in the premium vehicle segments where Mahindra has been thriving.

Already, luxury carmaker Mercedes-Benz has moderated its outlook for the financial year ending March 2026, revising expectations from growth to flat. The German manufacturer specifically cited the capital market correction as a significant contributor to this more cautious stance. As a brand that targets a similar affluent demographic, albeit at a different price point, Mahindra may face comparable headwinds in the coming months.

Moreover, Mahindra’s near-exclusive focus on SUVs, while tremendously successful in the current market environment, leaves it potentially vulnerable to shifts in consumer preferences or regulatory changes. Rising fuel costs, increased environmental concerns, or changes in taxation structures could all potentially impact the SUV segment disproportionately.

Inventory Concerns Further Cloud the Horizon

Despite the overall growth, FADA has raised concerns about rising inventory levels, which reached 50-55 days in March 2025. This inventory buildup could potentially lead to increased discounting and pressure on dealer profitability if not managed carefully.

In its report, FADA emphasized the importance of OEMs and dealers working together to set realistic targets that reflect market realities. Excessively aggressive objectives can create financial strain throughout the retail network, ultimately undermining the sector’s stability.

Looking Ahead: Cautious Optimism for FY26

Looking forward to FY26, FADA projects “low single-digit growth for PV,” with new model launches and expanding EV offerings expected to drive consumer interest. However, financing constraints and potential global economic headwinds could temper these prospects.

Industry observers are particularly watching Mahindra’s trajectory, wondering if it can maintain its impressive momentum and potentially challenge the established hierarchy further.

The question now is whether this represents a fundamental shift in consumer preferences that will sustain over the long term or if competitors can effectively respond to stem the tide. Moreover, the company’s heavy reliance on the premium SUV segment may become a liability if current economic pressures on the upper-middle class persist or intensify.
 

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