Automakers ride the affordability wave to log record sales in FY26

Domestic passenger vehicle sales rose by 16% in March, elevating annual volumes to a record 4.7 million vehicles in the just-ended fiscal year, fuelled by enhanced affordability after tax cuts last September and introduction of several new models.

Sales of cars, sedans, and utility vehicles rose 8.3% to 4.7 million units in FY26, from 4.34 million units the year before.

The Centre cut the GST on passenger vehicles with effect from September 22. Companies cut prices in response.

Senior auto industry executives said while there hasn’t been any major disruption to demand, supply, and production so far due to the Iran war, they are monitoring global geopolitical developments. For now, executives expect the demand momentum to sustain and domestic car sales to grow 5% this fiscal year.

Partho Banerjee, senior executive officer, marketing and sales at market leader Maruti Suzuki, said the FY26 car industry growth needs to be evaluated in two halves. “While the first half of the year was challenging, GST 2.0 unlocked demand in H2 helping us achieve our highest-ever domestic sales in FY26,” he said. Maruti closed the year with a 3.4% rise in sales at 1.82 million vehicles.

Maruti closed FY26 with orders outstandings of 190,000 vehicles and network stocks of 12 days. Exports last fiscal surged 34% to 447,000 units.

With sales of 66,192 vehicles in March, Tata Motors ranked second after Maruti. Mahindra & Mahindra and Hyundai Motor India followed with sales of 60,272 units and 55,064 units, respectively. In annual sales, Mahindra raced ahead of Tata Motors to claim the second position with its highest-ever sales of 660,276 units in FY26. Tata Motors sold 631,387 vehicles.

“The industry witnessed a strong rebound in the second half, posting double digit growth, supported by GST 2.0 implementation and a robust festive season,” said Shailesh Chandra, MD, Tata Motors Passenger Vehicles.

Tarun Garg, MD & CEO, HMIL, said, “Continuing the momentum gained in 2026, we (Hyundai) have achieved highest-ever quarterly domestic sales of 1,66,578 units in Q4 FY26.”

Japan’s Toyota, which operates in a joint venture with Kirloskar Group, too, saw sustained demand with sales growing 24% to 35,125 units in March.

In the commercial vehicle segment, Tata Motors recorded 18% sales growth at 45,825 units last month. Sales at Ashok Leyland grew 5% to 23,743 units. Girish Wagh, MD, Tata Motors (CV), said, “FY26 saw a subdued first half for the commercial vehicle industry, followed by a decisive recovery in H2 as demand conditions improved with the rollout of GST 2.0 and gained momentum through Q3 and Q4.”

Wagh, however, added in March, the monthly double-digit YoY sales growth saw some moderation amid the ongoing conflict in West Asia and its impact on select sectors of the economy.

In the farm equipment sector, Mahindra reported 33% growth at 43,403 tractors last month.

“A significant part of this high growth was driven by the full Navratri season falling entirely in March’26, unlike last year when it was split between March and April,” said Veejay Nakra, president, farm equipment business at Mahindra.