Mixed auto sector Q1: Mahindra soars, Maruti & Tata struggle amid small car woes

Mahindra & Mahindra, the country’s largest SUV (sports utility vehicle) manufacturer, reported its highest-ever sales in the April-June quarter of FY26. The company reported a 22% year-on-year increase in sales to 152,067 units in Q1 of FY26, as against 124,248 units in the same period last year, buoyed by its SUV portfolio. 

In contrast, Maruti Suzuki India Limited, the country’s largest automobile manufacturer, witnessed a 6.9% decline in its sales to 3.93,572 units as against 419,114 units in the same period last year. The company attributed the dismal performance of the small car market to be the reason behind this decline. 

“The slowdown in passenger vehicle sales is largely due to a sharp decline in the smaller segment cars. Historically, passenger vehicle sales used to grow at 1.5 times the GDP growth. But now, even after 6.5% GDP growth, the car market is nearly flat. This is because the once mass small car segment is not participating in the growth at all. This is clearly an affordability issue. Since 2019, the entry-level price point in the industry has jumped by over 70%, largely driven by stricter regulations, and the sales of smaller cars have fallen by over 70%,” says Rahul Bharti, Senior Executive Officer, Corporate Affairs, Maruti Suzuki.

Notably, Tata Motors reported a 10% year-on-year decline in its passenger vehicle sales during the quarter under review. The company sold 123,839 units in the April to June quarter of FY26, as against 1,38,104 units in the same period last year. 

“In Q1 FY26, the passenger vehicle industry experienced volume pressures, particularly in May and June, with flat growth reflecting continued softness in demand. The electric vehicle segment emerged as a bright spot, driven by robust growth and the launch of new EV models across OEMs, enhancing customer interest and consideration,” says Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd. and Tata Passenger Electric Mobility Ltd. 

The company’s electric vehicle portfolio witnessed a marginal decline of 2% to 16,231 units as against 16,579 units in the same period last year. 

“EV sales gained strong momentum towards the end of the quarter with a healthy growth trajectory. The refreshed Tiago posted 16% year-on-year volume growth in Q1 FY26 and new launches—Altroz and Harrier.ev — saw a positive market response, with their full impact expected in the coming months. Looking ahead, while overall industry growth is expected to remain subdued, Tata Motors is well positioned to leverage its new launches to outperform across segments—including hatchbacks and SUVs, while continuing to build on the EV momentum,” says Chandra, who is also the President at Society of Indian Automobile Manufacturers (SIAM). 

Meanwhile, Hyundai Motor India Limited sold 1,32,259 units in the Q1 of FY26, with domestic sales accounting for 132,259 units and exports accounting for 48,140 units. 

“We recorded a 13% year-on-year growth in export volumes for Q1 FY2026, with 48,140 units shipped compared to 42,600 units in the same period last year. This has elevated the share of exports to 26.7% of total sales in Q1 FY2026, up from 22.2% in Q1 FY2025. In the domestic market, the geopolitical situation continued to affect the market sentiment with domestic sales registering 44,024 units in June 2025,” says. Tarun Garg, Whole-time Director and Chief Operating Officer, Hyundai Motor India Limited.

In the two-wheelers, Bajaj Auto witnessed a 9% decline in domestic sales to 5,29,344 units in Q1 of FY26, as against 5,82,497 units in the same period last year. TVS Motor Company registered a growth of 17% with sales increasing from 10.56 lakh units in the first quarter of the financial year 2024-25 to 12.32 Lakh units in the first quarter of 2025-26.