Passenger vehicle industry to grow 1-2% in FY26

India’s passenger vehicle industry is expected to post a modest 1-2% growth for the financial year 2025-26, according to an industry-wide forecast.

“We are not expecting a very high growth this year for the auto industry,” said Partho Banerjee, Senior Executive Officer, Marketing & Sales, Maruti Suzuki India Ltd.

Maruti Suzuki’s retail sales grew 4% year-on-year to 17.45 lakh units in FY25 compared with 16.70 lakh units in FY24. This growth has mostly been on the back of strong rural sales as the urban market remained flat throughout the year.

Banerjee said the company’s inventory stock has come down to 27 days. “If any OEM is doing more wholesales than retails, then there will be issues,” he said.

While Maruti Suzuki will launch its maiden EV, the e-Vitara later this year, the Japanese automaker sold 20,672 strong hybrid cars (Grand Vitara and Invicto) in FY25, recording a year-on-year growth of 27%.

WagonR was Maruti Suzuki’s top-selling car in the last fiscal. Seven of the 10 top-selling vehicles in the country were from the Maruti stable.

The company recently discontinued production of its mid-size sedan Ciaz. “Time to time based on market needs, we re-evaluate our product portfolio. With Ciaz, we have taken a call that we need to stop production. The Ciaz brand is strong but forms can change from time to time. Baleno in 2004-2005 was a sedan, and then in 2015 we re-launched Baleno as a hatch. The brand is the soul but the shape of the vehicle keeps changing based on market needs,” said Banerjee.

On electric vehicles, Banerjee said India’s EV penetration is expected to be 2.7% in FY25. “EV is not the primary car. Till the time we don’t solve the concerns raised by customers: range, public charging infra and after sales service, EV is not going to be the primary, EV will always be the secondary car,” he said.

Penetration will only increase when there is adequate charging infrastructure across the country, he added.

India’s leading passenger vehicle manufacturer registered record total exports of 332,585 units in the financial year 2024-25, marking a 17.5% increase over the previous year’s exports of 283,067 units. Maruti Suzuki has been India’s top car exporter for four consecutive years with a market share of about 43%.

Maruti Suzuki has not increased car prices yet. Last month, the carmaker announced its plan to increase the prices of its cars from April 2025 owing to rising input costs and operational expenses. The price increase is expected to be up to 4% and will vary depending on the model.