A shift in India’s passenger vehicle rankings in FY26 has brought Tata Motors Passenger Vehicles Ltd closer to the top tier, as gains in compact SUVs, support from GST rationalisation and product updates helped it move ahead of Hyundai Motor India Ltd, while Mahindra & Mahindra Ltd retained the No.2 position.
The financial year 2025-26 saw a change in the market hierarchy. Mahindra & Mahindra held the No.2 position with 660,276 units, Tata Motors moved up to No.3 with 631,387 units, and Hyundai slipped to No.4 at 584,906 units, reversing the calendar year trend where Hyundai had retained third place.
Tata’s performance was anchored by its compact SUV portfolio, led by the Tata Nexon and Tata Punch. The Nexon recorded 216,054 units, making it the second-highest selling model in the country, while the Punch sold 183,980 units, placing it among the top six. Together, the two models contributed over 400,000 units, accounting for nearly two-thirds of Tata’s total volumes.
Demand in the sub-4 metre SUV segment remained steady through FY26, supported by GST rationalisation, which improved affordability and narrowed the price gap with hatchbacks. Tata Motors, with an established presence in this category, was among the key beneficiaries.
However, the data also highlights concentration risk, with a significant portion of Tata’s volumes tied to a limited set of models within the segment.
Quarterly Recovery Drives Second-half Momentum
Tata Motors’ FY26 performance followed a clear two-phase trajectory, with a weaker first half followed by a strong recovery.
The company ranked No.4 in both Q1 and Q2, before moving up to No.2 in Q3 and Q4, according to Vahan retail data. This shift was reflected in market share, which rose from 12.2% in Q1 to 12.7% in Q2, 13.7% in Q3 and 14.0% in Q4, marking a 180 basis point increase over the year. The full-year average stood at 13.3%.
In volume terms, quarterly dispatches increased from 123,839 units in Q1 to 198,743 units in Q4, indicating a near 60% rise in run-rate through the year.
The improvement suggests better alignment between supply and demand, along with higher retail throughput in the second half. Product updates, including refreshes to existing models such as the Punch, also supported showroom traction during this period.
Tata Motors was in the No.2 position in the second half of FY26, indicating that momentum is carrying into the current financial year.
Looking ahead, Tata Motors is expected to build on this momentum with a broader product pipeline. The company plans to introduce Safari EV and Sierra EV, aimed at expanding its presence in mid-size and higher-priced SUV segments.
Industry estimates indicate that bookings for the Sierra have crossed 1.3 lakh to 1.5 lakh and the automaker is steadily ramping up production, suggesting early demand visibility. Alongside continued volumes from the Tata Nexon and Tata Punch, this could support incremental growth in FY27.
“Nexon and Punch emerged as the highest selling SUV models in H2, underscoring the strength of our SUV portfolio, while industry-beating growth in hatchbacks reinforced their customer preference. Our recent launches of Sierra, refreshed Punch and petrol version of Harrier & Safari continue to see progressive growth in customer traction, across bookings, enquiries and deliveries,” said Shailesh Chandra, MD and CEO, Tata Motors PV.
“Looking ahead, industry momentum is expected to sustain, led by growth in SUVs, CNG and EV. At the same time, the industry will need to closely monitor geopolitical developments to mitigate potential supply-side risks. For Tata Motors Passenger Vehicles, we expect to build on the strong momentum of H2 and continue to deliver industry-beating growth in FY27, supported by recent launches, a strong pipeline of new products, and established multi-powertrain strategy,” he said.
Tata Motors’ relatively more affordable portfolio allows it to address a wider customer base, while Mahindra & Mahindra’s volumes remain skewed toward mid-size and premium SUVs. As Tata moves up the value chain and Mahindra expands its presence in compact SUVs, the overlap between the two companies is expected to increase. This positions Tata Motors to potentially challenge Mahindra for the No.2 spot, although the outcome will depend on execution across segments and the performance of new launches.
Tata Motors’ performance in FY26 reflects an improvement in volumes and market position, supported by compact SUV demand, policy tailwinds and product interventions. Whether this translates into a sustained change in rankings will depend on how effectively the company diversifies its portfolio and maintains momentum beyond its core models.