Amid External Headwinds, Automobile OEMs Gear Up To Navigate Bumpy Roads Looking ahead, demand growth will be shaped by macroeconomic factors such as consumption growth, inflation, infrastructure spending and global geopolitics
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India's automobile industry grew 9 percent year-on-year (YoY) to 22 lakh crore with 26.1 million units sold in 2024, surpassing Japan to become the third-largest global player. Passenger vehicles (PVs) have experienced consistent growth in production, sales, and exports. The recent announcements of quarterly results by automobile OEMs (original equipment manufacturers) give deeper insights into the market as tariffs and related geopolitical actions make the operating environment uncertain and challenging.
According to reports, PV production and sales surpassed 4.5 million units by 2022-23 and are projected to reach over 5.6 million units by 2026-27. Export volumes have also shown significant growth, from 404,397 units in 2020-21 to an estimated 841,593 units in 2026-27, reflecting strong international demand and increasing domestic market penetration.
Reflecting a growth sentiment, Mahindra & Mahindra Limited, in its latest earning call revealed that consolidated revenue for the fourth quarter went up by 24.5 percent from last year to INR 31,353 crore. Net profit for the quarter stood at INR 2,437 crore. Rajesh Jejurikar, executive director & CEO (Auto and Farm Sector), M&M Ltd. said, "We continued our outstanding performance for the year in Q4-F25, with significant gain of 310 bps YoY in SUV revenue share, and 480 bps YoY in LCV (< 3.5T) market share. In Tractors, we reached our highest-ever Q4 market share of 41.2 percent, gaining 180 bps YoY. In F25, our Auto Standalone PBIT margin improved by 110 bps and core tractor PBIT margins improved by 200 bps."
In FY 2024-25, Maruti Suzuki India recorded its highest ever annual total sales and exports. The company continued to be the top exporter for the fourth consecutive year, now contributing nearly 43 percent of total passenger vehicle exports from India. However, in the fourth quarter of FY25, it reported a marginal decline of 1 per cent year-on-year (Y-o-Y) in the consolidated net profit. PAT stood at INR 3,911 crore in Q4 FY25 compared to INR3,952 crore in Q4 FY24. The firm sold 604,635 units during Q4, the highest ever in any quarter.
"The fourth quarter demonstrated our ability to maintain sales momentum in a challenging environment, though profitability faced some pressure due to rising input costs and competitive market dynamics," said Hisashi Takeuchi, MD & CEO, Maruti Suzuki India Limited, in a statement.
Although, Maruti Suzuki held 40.26 percent PV market share but Mahindra gained significantly with its SUV lineup.
Companies aim to maintain a heightened vigil on costs and cash flows whilst continuing to invest in the future. Due to external headwinds, Tata Motors reported a 51 percent decline in consolidated net profit for the fourth quarter ended March 31, 2025, at INR 8,556 crore, down from INR 17,528 crore in the same period last year.The fall was primarily attributed to lower volumes and reduced operating leverage. The company's consolidated revenue from operations stood at INR 1,19,503 crore, marginally up from INR 1,19,033 crore in the quarter.
"On a consolidated basis the automotive business is now debt-free, reducing interest costs. This is both pleasing and significant as it reflects healthy business fundamentals delivered by a resilient team. Drawing strength from it, in this environment of heightened uncertainty, we will remain agile, proactively drive our growth agenda, reduce our cash break even further whilst continuing to invest in our future. With the shareholders also approving the demerger, we are on track to realise the full potential of each of the businesses," said PB Balaji, group chief financial officer, Tata Motors.
The global premium luxury segment and Indian domestic markets are expected to weather this challenge relatively better. Meanwhile, the sales volumes at JLR rose 1.1 percent in the quarter, helped by strong demand for its highly profitable SUVs in North America and Europe. Adrian Mardell, JLR CEO, said, "JLR has ended the year with strong annual and quarterly earnings, including delivering our tenth consecutive profitable quarter and our net debt zero target. We have achieved record sales of Defender, revealed the stunning Jaguar Type 00 and we are preparing to launch the wonderful Range Rover Electric. This strong and consistent performance, the commitment of our people, partners and clients and the appeal of our luxury brands will support our response to current global economic challenges including the evolving global trading environment."
In the calendar year (CY 2024), Maruti Suzuki retained dominance in the PV OEM segment, with 40.26 percent market share. This was followed by Hyundai Motor India at 13.75 percent, Tata Motors at 13.21 percent, and Mahindra & Mahindra (M&M) at 12.03 percent. M&M recorded robust growth fueled by demand for its Thar, XUV700, and Scorpio-N SUVs. Toyota Kirloskar grew 34 percent YoY and had a market share of 6.35 percent.
Overall, looking ahead, demand growth will be shaped by macroeconomic factors such as consumption growth, inflation, infrastructure spending and global geopolitics. However, industry momentum is expected to be driven by continued innovation in line with evolving customer preferences. SUVs, CNG, and EVs will remain key growth drivers, fueling the industry's expansion.
