Even after the end of the holiday season, the Indian car industry is still exhibiting strong demand momentum in the wake of GST rationalization. The continued popularity, according to market analysts, is indicative of sound underlying consumption patterns, especially in entry-level cars for both passengers and two-wheelers. A normalization of market dynamics, bolstered by a better supply-demand balance, is further shown by the progressive decrease in discounts.
In light of this, domestic brokerage Motilal Oswal has reaffirmed its optimistic outlook on the industry. The company’s top choices for original equipment manufacturers (OEMs) are Maruti Suzuki, Mahindra & Mahindra (M&M), and TVS Motor Company. Endurance Technologies, SAMIL, and Happy Forgings are identified as important benefactors of the current resurgence among auto ancillary stocks.
Demand for utility vehicles drives passenger cars
In November 2025, the passenger vehicle (PV) category had a robust 18.7% year-over-year increase, driven by consistent performance across automobiles and utility vehicles (UVs). Some OEMs have greatly surpassed the industry average, even if year-to-date growth is still only 3.6%.
Strong demand for the Thar and successful electric vehicle launches, which combined have contributed almost 31,000 units so far this year, were the main drivers of Mahindra & Mahindra’s 18% year-over-year gain. With the help of the Innova Hycross, which has already overtaken the Crysta in the sales mix, Toyota announced 16% increase. Due in significant part to consistent demand for the Carens model, Kia also produced a 9% gain.
Maruti Suzuki and Hyundai, on the other hand, had comparatively flat or dropping volumes, which is indicative of muted performance in particular areas. Although year-to-date sales were somewhat lower, November volumes in the automobile category increased by 17% year over year. While entry-level models like the Alto and Spresso witnessed significant decreases, vehicles like the Dzire and Grand Vitara emerged as major growth drivers for Maruti. M&M, Toyota, and Kia kept gaining market share in the UV sector, highlighting the ongoing trend of consumers choosing bigger, more expensive cars.
TVS Motor is the leader in two-wheelers
Thanks to increased dealer inventory levels and festive order spillovers, the domestic two wheeler (2W) internal combustion engine market had strong year-over-year growth of 19.1% in November 2025. However, because of poor demand in the first quarter, year-to-date growth is still subdued at 2.2%.
TVS Motor was the only OEM among the top players to increase its market share, increasing it by 190 basis points so far this year to 18.8%. Hero MotoCorp and Honda Motorcycle & Scooter India (HMSI), on the other hand, lost market share in the same time frame.
Motorcycles above 250cc continued to do well in this segment, with Royal Enfield’s Bullet 350 leading the way. The Apache and Ronin models propelled TVS Motor’s robust expansion in the 150–250cc class.
Prospects for the sector and valuation forecast
Sustained post-festive demand, especially for entry-level cars, is seen by Motilal Oswal analysts as a major advantage for the industry. Both OEMs and dealers should see an increase in margins as inventory levels stabilize and discounts diminish.
M&M gains from its leading UV range and stable tractor business, while Maruti Suzuki continues to be a preferred choice because of its robust product pipeline and export expansion. Due to steady increases in market share, TVS Motor is still favored in the two wheeler industry. All things considered, the Indian car industry is well-positioned for consistent growth through 2026 because to strong demand and advantageous product mix trends.
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