The auto industry is expected to see a strong growth cycle in 2026.The year 2025 ended in a cheer for the Indian auto industry, with most OEMs reporting double-digit growth in domestic sales in December.
The automakers attributed the growth momentum to GST rate cut, income tax rebates announced in the last Union Budget and the Reserve Bank of India’s cumulative 125 basis points repo rate cut announced in its December MPC meeting.
Earlier in the year, a slowing economy weighed down the industry which was reeling under sluggish demand.
During the last month of the year, Maruti Suzuki–no guesses–retained the crown of the industry with domestic sales of 1.92 lakh units, registering a 36.5 per cent YoY growth.
The company has pending bookings of around 1.75 lakh units, Partho Banerjee, Senior Executive Officer – Marketing and Sales, said during the post-earnings call, according to media reports.
Total sales, including exports, stood at 217,854 units in December, with inventory levels of around three days. The company has a waiting period of about 45 days for several models. In 2025, the Dzire emerged as the industry’s top-selling model with 2.14 lakh units, while Baleno also contributed significantly.
Continuing its acceleration, Mahindra & Mahindra moved up to second position in December with sales of 50,946 units, compared with 41,424 units a year ago. Strong demand for Scorpio, XUV700, Thar, Bolero and XUV 3XO helped the company post a 23 per cent year-on-year growth.
“The calendar year 2025 ended on a positive note, with Mahindra clocking its highest-ever volumes in both SUVs and LCVs (
Meanwhile, Tata Motors slipped to third position with sales of 50,046 units last month, even though it reported a 13.1 per cent growth. For the company, Punch continued to lead its segment, while Tiago delivered steady volumes.
“Q3 FY26 also saw major product introductions, including Harrier and Safari in petrol and the launch of Sierra,” said Shailesh Chandra, MD and CEO, Tata Motors Passenger Vehicles Ltd.
Hyundai Motor India, which has been facing a period of rough patch in the country, slipped to fourth position with domestic sales of 42,416 units in December. The South Korean automaker reported flat growth in the domestic market, while total sales rose 6.6 per cent YoY, supported by exports. According to the carmaker, Creta remained one of the flagship products for the company and the new Venue received 55,000 bookings within two months.
“Exports grew 26.5 per cent year-on-year in December,” said Tarun Garg, Managing Director and CEO, Hyundai Motor India.
| 2024 | OEM | Rank | OEM | 2025 |
| 140,829 | Maruti Suzuki | 1 | Maruti Suzuki | 192,115 |
| 44,230 | Tata Motors | 2 | Mahindra | 50,946 |
| 42,208 | Hyundai | 3 | Tata Motors | 50,046 |
| 41,424 | Mahindra | 4 | Hyundai | 42,416 |
| 24,887 | Toyota | 5 | Toyota | 34,157 |
Toyota Kirloskar Motor retained fifth position with sales of 34,157 units in December.
“2025 was a meaningful year for Toyota, with stronger acceptance across domestic and export markets,” said Varinder Wadhwa, Vice-President, Sales-Service-Used Car Business and Profit Enhancement.
Other OEMs reporting a strong growth
Among other OEMs, Kia India reported sales of 18,659 units, up 105 per cent from 8,957 units in December 2024.
JSW MG Motor India reported wholesales of 6,500 units in December and total volumes of 70,554 units for 2025, up 19 per cent year-on-year. MG Select registered a 38 per cent month-on-month growth, driven by the M9 Presidential Limousine and Cyberster electric sports car.
Renault India sold 3,845 units in December, up 33.4 per cent year-on-year.
“Recovery from Q3 onwards and a strong Q4 confirm that the course correction is delivering results,” said Stephane Deblaise, CEO, Renault Group India.
In the two-wheeler segment, Royal Enfield reported domestic sales of 93,177 motorcycles, a 37 per cent growth, while TVS also reported a strong 54 per cent YoY growth with 330,362 units sales in December 2025. On the two-wheeler side, most OEMs are yet to announce December numbers.
Outlook
The passenger vehicle market in the country is expected to grow by 6 to 7 per cent in 2026, supported by improving affordability, stable macroeconomic conditions and rising consumer demand, Maruti’s Banerjee said.
Industry momentum built over the past four months following the GST cut is expected to carry into January and through 2026, driven by strong enquiries, improving affordability and stable vehicle prices.
“While some price increases are likely from April due to inflation and ahead of the festive season, the overall outlook remains positive, with the industry positioned for one of its strongest sales years in calendar 2026, provided manufacturers avoid sharp price hikes,” said Puneet Gupta, Director India and ASEAN Automotive Market at S&P.
The growth outlook is backed by a pipeline of new launches, including the Maruti Suzuki eVitara, Renault’s return of the Duster, Tata Punch facelift and Mahindra XUV 7XO.
“We are entering the next phase with confidence, and the return of the iconic Duster will mark a significant step forward in Renault’s renewed journey in India,” Deblaise said.
Tata Motors plans to rely on upcoming launches and innovations to accelerate growth in FY26, while Toyota aims to strengthen its product portfolio, enhance customer touchpoints and deepen engagement with younger buyers.
With this, the auto industry is expected to see a strong growth cycle in 2026.
