Saturday, April 04, 2026
By Kamal Swami
Indian Car Market Grows Despite Rising Costs
India’s automotive industry witnessed a substantial increase in car sales in March, highlighting increased consumer demand and a positive close to the financial year 2025–26. However, increasing production and logistics costs are forcing leading automakers like Tata Motors, BMW, and Audi to reconsider their pricing strategies. According to industry data, major car manufacturers reported double-digit growth in wholesale dispatches during March. An interesting feature is that all this is happening despite ongoing geopolitical tensions in West Asia. Although companies acknowledged that these global uncertainties have contributed to increasing cost pressures.
Several automakers, including JSW MG Motor India, Mercedes-Benz, and Audi, have already implemented price hikes effective April 1. These increases range from 0.5% to 2%, primarily due to higher input costs and rising logistics expenses. Maruti Suzuki is also planning to revise its prices in the near future. As per sales data provided by the industry, vehicle dispatches rose to approximately 47 lakh units in FY26, compared to 43.3 lakh units in FY25, marking a growth of 8.2%. Maruti Suzuki dominated the market with domestic sales of 18.2 lakh units. Whereas domestic carmaker Mahindra & Mahindra and Tata Motors succeeded in surpassing the second largest carmaker Hyundai Motors (5.8 lakh units) with 6.6 lakh units and 6.3 lakh units respectivley.
Despite the strong performance, industry leaders have shown concerns over rising costs linked to global uncertainties. Partho Banerjee, Head of Marketing and Sales, highlighted that companies are currently absorbing the increased costs but may eventually pass them on to consumers. Experts believe that factors like year-end targets and festive demand played an interesting role in increasing demand for vehicles. In the words of Gaurav Vangaal, S&P Global Mobility, factors such as rising input costs, a weaker rupee, and supply chain disruptions could impact demand in the coming months.
Looking ahead, the industry is expected to maintain its growth momentum, driven by increasing consumer preference for SUVs, CNG vehicles, and electric vehicles (EVs). Shailesh Chandra, MD and CEO of Tata Motors Passenger Vehicles, emphasized the importance of closely monitoring geopolitical developments to mitigate potential supply-side risks.
Ravi Bhatia, President of JATO Dynamics India, added that while demand has strengthened significantly post GST implementation, certain risks continue to persist.
