May Auto Sales: Tracing Mahindra's Ascent to India's No.2 Car Brand

The month of May 2025 has more or less established Mahindra & Mahindra as India's second-largest passenger vehicle brand, but behind this rise lies a story of multi-year strategic planning and brand transformation that could become a business school case study.

The company's journey from a brand primarily associated with tractors and commercial vehicles to challenging established players like Hyundai and Tata Motors reflects broader changes in both the Indian automotive market and consumer preferences.

For decades, Mahindra operated with a different brand perception compared to foreign manufacturers, particularly Hyundai, which entered the Indian market in the late 1990s with contemporary technology and design. While Hyundai brought global design language and advanced features to India, Mahindra was viewed as a brand that made functional, reliable vehicles but lacked the refinement that urban Indian buyers increasingly sought.

The Korean manufacturer's success with models like the Santro, i10, and later the Creta established consumer expectations for modern passenger vehicles: contemporary styling, feature-rich interiors, smooth engines, and the prestige associated with international brands. Hyundai's vehicles came with features that were novel for the Indian market at the time—automatic climate control, power steering as standard, and refined interiors with soft-touch materials. The Santro's "Sunshine Car" campaign and the i10's European design language created aspirational value that resonated with upwardly mobile Indian families.

A Perception Issue

In contrast, Mahindra's early passenger vehicle attempts, including the Bolero and Scorpio, while commercially successful, were often viewed as utilitarian rather than aspirational. The original Scorpio, launched in 2002, was undeniably capable and reliable, but its interiors featured hard plastics, basic instrumentation, and a utilitarian design philosophy that prioritized function over form. Even successful models like the Bolero were perceived as vehicles for rural markets or commercial use rather than urban family transportation.

This perception challenge was compounded by Mahindra's heritage in commercial vehicles and tractors. While this background provided credibility in terms of reliability and ruggedness—qualities valued in Indian operating conditions—it also created barriers for consumers seeking vehicles that reflected lifestyle aspirations. Urban buyers in cities like Mumbai, Delhi, and Bangalore often associated Mahindra with the rugged vehicles they saw on construction sites or in rural areas, making it difficult for the brand to break into affluent suburban driveways where German sedans and Korean hatchbacks were preferred status symbols.

Recognizing these challenges, Mahindra began a systematic effort to change market perceptions. The company established design studios in multiple countries and began collaborating with international design houses to create vehicles that could match global standards in aesthetics and appeal. Mahindra hired designers from global automotive companies and invested in advanced computer-aided design capabilities. The company also began studying global SUV trends, particularly from markets like the United States and Europe where utility vehicles had already gained mainstream acceptance.

The XUV500, launched in 2011, marked a notable shift in this positioning. Unlike previous Mahindra offerings, the XUV500 featured contemporary styling with a distinctive cheetah-inspired design language, a well-appointed interior with features like a touchscreen infotainment system, GPS navigation, and six airbags—specifications that directly competed with premium offerings from international brands. The vehicle's marketing campaign positioned it as "Authentic SUV" and emphasized its global design credentials and advanced features. The XUV500's market acceptance indicated that Indian consumers were open to domestic brands when they offered competitive value propositions, with the vehicle achieving waiting periods of several months shortly after launch.

One or Two Hiccups

Mahindra's transformation wasn't without setbacks. The Marazzo, launched in 2018 as an MPV to compete in the people-mover segment, failed to achieve commercial success despite being a well-engineered product with contemporary design and features. The Marazzo featured a shark-inspired design, premium interiors with captain's chairs, and advanced features like a touchscreen infotainment system and multiple airbags. However, it struggled against established players like the Toyota Innova and changing consumer preferences that were shifting toward SUVs rather than MPVs.

While the Marazzo's market failure was disappointing, it served important purposes in Mahindra's evolution. The vehicle demonstrated to the automotive press and industry observers that Mahindra could develop sophisticated products beyond its traditional SUV expertise. Auto journalists praised the Marazzo's ride quality, interior space, and build quality, even if sales numbers didn't follow. The project also showcased Mahindra's evolving design language and reinforced that M&M's core strength lay in SUVs rather than attempting to compete across all passenger vehicle segments.

The Marazzo experience, along with other strategic experiments, helped refine Mahindra's understanding of its brand positioning and consumer expectations. Even unsuccessful products contributed to building credibility around the company's technical capabilities and design evolution.

Getting it Right

The launch of the XUV700 represented a culmination of Mahindra's brand evolution efforts. Positioned as a premium SUV with advanced driver assistance systems (ADAS), premium interiors featuring dual-zone climate control, a panoramic sunroof, and Sony 3D sound system, the XUV700 competed directly with established offerings from international manufacturers. The vehicle featured Level 2 autonomous driving capabilities, adaptive cruise control, and automatic emergency braking—technologies typically found in luxury vehicles costing significantly more.

The XUV700's market performance was notable because it went head-to-head with premium offerings from Hyundai (Creta, Alcazar), Tata (Harrier, Safari), and other international brands, often matching or exceeding their feature lists while maintaining competitive pricing. The vehicle's launch generated unprecedented interest, with Mahindra receiving over 50,000 bookings within hours of opening reservations. Its acceptance suggested a shift in consumer perceptions about domestic brand capabilities, with buyers willing to choose an Indian brand over established international alternatives for a premium purchase.

Similarly, the new-generation Scorpio-N, launched with modern design language while retaining the rugged DNA that made the original Scorpio successful, demonstrated Mahindra's ability to evolve heritage products without losing their core appeal. The Scorpio-N featured a completely redesigned interior with soft-touch materials, a large touchscreen infotainment system, and premium features like wireless phone charging, while maintaining the high ground clearance, robust build quality, and commanding driving position that made the original Scorpio popular. The vehicle's "Big Daddy of SUVs" positioning and aggressive pricing strategy helped it achieve strong initial sales, with waiting periods extending to several months in key markets.

The Serendipity Factor

The timing of India's SUV preference shift worked in Mahindra's favor. The utility vehicle segment, which represented less than 20% of the passenger vehicle market in 2015, has grown to account for over 50% of total sales by 2025. This dramatic shift was driven by multiple factors: improved road infrastructure that made larger vehicles more practical in cities, rising income levels that allowed families to afford bigger vehicles, and changing lifestyle preferences where SUVs became symbols of success and adventure.

This shift aligned with Mahindra's existing capabilities. While other manufacturers had to adapt their strategies to capitalize on SUV demand—with companies like Maruti Suzuki having to develop entirely new SUV platforms and Honda struggling to establish an SUV presence—Mahindra's two decades of experience in utility vehicles positioned it to leverage this market transition without having to build entirely new competencies. The company's manufacturing facilities were already optimized for SUV production, its dealer network understood SUV customers, and its engineering teams had deep expertise in developing capable off-road vehicles.

The SUV Specialist

The company's portfolio now spans multiple SUV sub-segments: the Thar appeals to enthusiasts seeking authentic off-road capability, the Bolero continues serving rural and semi-urban markets, the Scorpio/Scorpio-N bridges traditional ruggedness with modern sophistication, the XUV300 competes in the compact SUV segment, and the XUV700 targets premium buyers seeking advanced technology. This comprehensive coverage allows Mahindra to capture demand across price points and use cases.

While competitors like Hyundai and Tata Motors maintain diversified portfolios across sedans, hatchbacks, and SUVs, Mahindra's decision to focus almost exclusively on SUVs has proven strategically beneficial. This singular focus enables economies of scale in component procurement and manufacturing processes specific to utility vehicles. It creates clear brand positioning in consumer minds—when Indian buyers think of domestic SUV brands, Mahindra enjoys strong recall. The focus also allows the company to concentrate engineering, marketing, and dealer development resources on mastering the SUV category rather than spreading efforts across diverse vehicle segments.

Mahindra's rise to No.2 position reflects broader changes in the Indian automotive market beyond just the SUV boom. The success highlights how domestic brands have gained credibility with Indian consumers who previously showed strong preference for international brands. As domestic companies have invested in quality, design, and technology, consumers have become more willing to consider Indian brands for aspirational purchases.

Throughout its transformation journey, Mahindra maintained its core reputation for reliability and ruggedness. While the company worked to address perceptions about refinement and sophistication, its heritage of building durable vehicles remained an asset. In a market where consumers value long-term reliability, this foundation provided competitive advantage as the brand evolved.

For Hyundai, Mahindra's domestic market position represents a strategic challenge. The Korean manufacturer must balance its strength in exports with domestic market performance, particularly as M&M demonstrates that focused domestic strategies can be effective. Mahindra's success also validates the SUV-focused strategy and may influence other manufacturers' portfolio decisions.

While Mahindra's achievement of No.2 position is significant, sustaining this leadership will require continued execution. As competitors invest heavily in electric vehicles, advanced driver assistance systems, and connected car technologies, Mahindra must continue evolving its technology offerings. The company must balance its rugged heritage with contemporary consumer expectations for sophistication across its expanding SUV portfolio.

Mahindra's rise to India's No.2 passenger vehicle position represents more than market share gains; it demonstrates how strategic focus, brand evolution, and market timing can reshape competitive dynamics. The May 2025 numbers—52,431 units with 21% growth—suggest this reflects sustained strategic execution rather than temporary market conditions. As India's SUV market continues expanding and consumers become increasingly accepting of domestic brands that deliver quality and innovation, Mahindra appears positioned to maintain its market standing.

The company that was once viewed as utilitarian compared to foreign brands has established itself as the clear domestic market leader in India's second position—a transformation that reflects broader changes in both consumer preferences and domestic manufacturing capabilities in the Indian automotive sector.