The passenger vehicle (PV) industry kicked off FY27 on a strong note, posting a 25.1% year-on-year rise in domestic wholesales to 4,45,417 units in April, up from 3,56,113 units in the same month last year.
The growth was led by Maruti Suzuki India, which recorded a 35.3% jump to 1,87,704 units from 1,38,704 units, followed by Tata Motors at 59,000 units, up 30.5% from 45,199 units. Mahindra & Mahindra saw a more modest increase of 7.6% to 56,331 units. Hyundai Motor India grew 17% to 51,902 units, Toyota Kirloskar Motor rose 21.4% to 30,159 units, and Kia India posted a 15.5% increase to 27,286 units.
Analysts attribute the robust growth to the lasting effects of the September 2025 GST cut, rising demand for SUVs, and a revival in rural markets, particularly for small cars.
Small Car Revival
Maruti Suzuki, the country’s largest carmaker, reported its highest-ever monthly sales, crossing 239,646 units, with domestic sales also reaching record levels. SUV sales hit an all-time high of 55,000 units. “Rural market response is very good. We grew 39% in April, and our rural penetration now stands at 52.3%, up 2.4 percentage points compared to last year,” said Partho Banerjee, Senior Executive Officer – Marketing & Sales, Maruti Suzuki India.
The surge has been fueled by a comeback of small cars, a segment under pressure in recent years due to rising costs, regulatory changes, and a consumer shift toward SUVs. With better availability and price adjustments, entry-level vehicles are attracting buyers again, especially two-wheeler owners looking to upgrade.
Banerjee stated that the company is working to catch up to the required production levels for these cars, after supply constraints had previously limited small car output. “Over the last four to five years, we modified our production lines, and it took time to ramp up again when demand returned. From April, we’ve partly unlocked capacity, allowing us to meet the rising demand,” Banerjee added.
The strong numbers are also a reflection of a low base. April 2025 had been sluggish, impacted by muted demand and macroeconomic pressures. A strong rebound followed the GST 2.0 implementation in September 2025, which acted as a demand trigger, boosting consumer sentiment and showroom footfalls, particularly during the festive season.
Structural Shifts
Last year, the Society of Indian Automobile Manufacturers (SIAM) had projected low single-digit growth of 1–4% for FY26, anticipating weakness in entry-level segments. Structural shifts in consumer preferences have since supported sustained growth. SUVs continue to dominate, driving volume across manufacturers’ portfolios and increasing their share of overall PV sales. Meanwhile, cleaner mobility options are gaining traction, aided by better infrastructure, policy support, and wider product availability.
The rise in CNG vehicle sales and improving consumer confidence in EVs are expected to drive growth in FY27, according to Shailesh Chandra, SIAM president. “Looking ahead, industry momentum is expected to continue, led by growth in SUVs, CNG, and EVs,” Chandra had said last month.
Chandra, however, had cautioned that automakers must monitor geopolitical developments closely to mitigate potential supply-side risks. For FY27, industry outlooks are cautious: Nomura projects growth to moderate to around 8%, while Crisil estimates a more conservative 3–5% expansion amid easing pent-up demand and rising price pressures.