Domestic passenger vehicle sales rose 21.4% year-on-year to 4,63,081 units in September 2026, from 3,81,435 units in September 2025, but the sharp growth was partly aided by a low base in the year-ago period, when the GST rate cut came into effect only on September 22 and demand was concentrated towards the final week of the month.
The comparison is likely to become tougher from October as the industry will face a higher base, with the GST-led demand boost having been reflected through the full month last year. However, September’s growth was broad-based, with the country’s four largest passenger vehicle manufacturers reporting year-on-year growth.
Maruti Suzuki recorded the strongest domestic growth among the major carmakers, with sales rising 36.9% to 1,81,838 units in September 2026, from 1,32,820 units in September 2025. Tata Motors’ passenger vehicle sales rose 15.3% to 68,810 units from 59,667 units. Mahindra & Mahindra’s SUV sales increased 14% to 64,092 units from 56,233 units. Hyundai Motor India sales increased 10.9% to 57,166 units from 51,547 units.
Maruti management expects the industry’s absolute volumes to remain strong despite the base effect. The company has estimated the overall passenger vehicle industry at 5.3-5.4 million units for FY27, with industry growth of at least 10%.
While the growth rate is expected to moderate in the second half due to a higher base, Partho Banerjee, Senior Executive Officer, Marketing and Sales, Maruti Suzuki India, said, “the absolute numbers, I feel, will further increase.”
Maruti’s September performance was supported by higher supplies as newly commissioned plants ramp up production. The company said its network inventory stood at only 17 days, while pending bookings had crossed 2 lakh units, indicating that supply availability remains an important factor in determining its ability to convert demand into sales. Maruti also flagged global uncertainty and commodity costs as risks to the outlook, although it said the impact from current commodity prices was not yet significant.
The September numbers also point to a recovery in smaller cars, after several years in which SUVs dominated the industry’s growth narrative. Maruti said hatchback sales grew 41%, while SUV sales increased 56%.
The company is now selling close to 56,000 SUVs a month, compared with around 61,000 units by the industry’s largest SUV player. Maruti also said entry-hatch sales had grown sharply in H1, indicating that the recovery in smaller cars is not restricted to a single month.
The automaker attributed the revival in smaller cars partly to improved affordability following GST 2.0. The company said the tax changes have helped customers at the lower end of the market upgrade from two-wheelers to passenger vehicles.
Tata Motors also pointed to the broader demand recovery following GST 2.0. Shailesh Chandra, MD and CEO, Tata Motors Passenger Vehicles, said passenger vehicle demand had “sustained the strong momentum seen following GST 2.0”, with industry Vahan volumes growing around 24% year-on-year in Q2.
Tata Motors’ greener powertrain portfolio continued to support its performance. EV sales crossed 47,000 units in Q2, up 90% from the year-ago period, while CNG accounted for 28% of its volumes. Together, EVs and CNG vehicles contributed 51% of its sales.
Mahindra’s September SUV sales rose 14% to 64,092 units from 56,233 units a year earlier, while total vehicle sales increased 15% to 1,14,874 units. The company also crossed one lakh cumulative billings of its electric-origin SUVs since launch.
With the festive period now underway, automakers remain positive on demand.
