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Informist, Thursday, Apr. 2, 2026

 

By Anand JC

 

NEW DELHI – Despatches of passenger vehicles by India's top automobile companies in March grew at a faster pace year-on-year than in February but at nearly half the growth rate registered in March last year. Domestic sales held fort, but exports moderated due to the ongoing war in West Asia. If the war lasts longer, it could upend the sales momentum created by a slew of macroeconomic reforms undertaken last year, industry officials said.

 

The ongoing war has led to an increase in prices of crude oil, crude-linked products integral to manufacturing cars, and metals such as aluminium. "We are having three tailwinds which are going pretty well...but yes, there is one headwind there in terms of the commodity prices which have started going up," Partho Banerjee, senior executive officer of Maruti Suzuki India Ltd.'s marketing and sales division, said at a press conference Wednesday. "In fact, it is going to nullify part of the tailwinds which are already there," Banerjee said. The tailwinds here include the income tax break announced in the Union Budget, the cumulative repo rate cut of 125 basis points in 2025, and the cut in the goods and services tax in October. Maruti Suzuki has been India's biggest passenger vehicle exporter for the last five consecutive years.

 

India's major automobile companies – Maruti Suzuki, Hyundai Motor India Ltd., Tata Motors Passenger Vehicles Ltd., and Mahindra & Mahindra Ltd. – together despatched 409,506 cars in India and abroad in March, up nearly 17% on year and 5% on month. Wholesale sales of passenger vehicles by these companies had grown 14% on year in February and 30% in March last year. Including sales by unlisted companies, the industry is estimated to have sold roughly 450,000 cars in March, up from 390,000 units a year ago.

 

Domestic wholesale sales by these companies grew 15% on year and 3.6% on month to 347,747 units. Despatches in India had grown almost 10% on year in February and 24% in March last year. However, exports painted a sobering picture of the demand for cars. Exports in March grew 27% on year and nearly 15% on month to 61,759 units. The year-on-year growth rate in March was much lower than the 48% registered in February and almost 87% registered in March last year. The tally for exports excludes M&M as the company does not export its passenger vehicles.

 

The war in West Asia has prompted worries about potential risks to output plans of automobile companies as it has disrupted supplies of natural gas globally. Original equipment manufacturers use gas in their paint shops and during the curing process.

 

"So far, our operations are running perfectly normal. We have heard of some challenges for future supplies of gas," Rahul Bharti, executive director in charge of corporate affairs at Maruti Suzuki, said. "Of course, the war is everybody's knowledge. It may affect to some extent, it depends on how long and how deep the impact is," Bharti said. The outlook for Maruti Suzuki's exports is not clouded as its markets are well diversified, the company said. West Asia accounts for 12.5% of the Victoris maker's exports.

 

"Currently, OEMs indicate that gas availability remains adequate through March and April. However, industry checks suggest that if supply tightness persists beyond a couple of weeks, production risks could emerge May 26 onwards," Nirmal Bang Institutional Equities said in a report last week. "While mitigation options exist – such as switching to alternative fuels or government prioritisation of industrial gas allocation – these measures require time and involve higher operating costs," Nirmal Bang said.

 

Hyundai Motor recorded its best March ever for the domestic market as sales grew 6% on year to 55,064 units. However, its exports fell 10% on year to 13,940 units. On an average, Hyundai Motor exported 15,844 units every month in 2025-26 (Apr-Mar). "While we stay mindful of the prevailing geopolitical uncertainties, Hyundai Motor India is well prepared for a strong FY2026–27," the company's Managing Director and Chief Executive Officer Tarun Garg said in a release.

 

Exports form only a fraction of Tata Motors PV's overall sales. Yet in March, the company's exports zoomed to 779 units from 256 units a year ago. Its domestic sales grew 28% on year to 66,192 units. "Looking ahead, industry momentum is expected to sustain, led by growth in SUVs, CNG (cars fuelled by compressed natural gas) and EV (electric vehicles)," the company's MD and CEO Shailesh Chandra said in a release. "At the same time, the industry will need to closely monitor geopolitical developments to mitigate potential supply-side risks," he said.

 

WAR AND SENTIMENT

Analysts were sceptical about domestic demand for automobiles taking a hit immediately after the war broke in the Persian Gulf a month ago. Rising fuel prices in the global market have not deterred customers in India as state-run oil marketing companies have not hiked fuel prices. "While there have been concerns that the Iran-US war could impact consumer sentiment, so far there is negligible impact visible in our dealer surveys," Nomura Research said in a report.

 

In the March quarter, almost all passenger vehicle firms, except Maruti Suzuki, undertook price hikes to pass on the burden of rising commodity costs. "Keeping in mind that first-time buyers are coming (to dealerships), we have been holding on as we don't want to pass on the cost," Maruti Suzuki's Banerjee said. "But unfortunately, the commodity prices are going very high. We need to pass it on," he said. However, he did not provide details of how much the company would hike prices by and when.

 

The company's entry-level segment has gained significantly from the price cuts following the GST cut late last year. Customers in this segment are extremely price-sensitive and any hike could derail growth momentum in the domestic market. "We would monitor the demand impact over the next two months as OEMs (original equipment manufacturers) will likely raise vehicle prices in April (~0.5-1.5%) and fuel prices could increase in May after state elections. Any rise in fuel prices can shift consumer sentiment toward EVs (electric vehicles)," Nomura said.

 

Crude oil prices have crossed $110 per barrel in March, up sharply from $73 just a day before the war. While oil marketing companies can hold off hikes in prices of petrol and diesel, the pain does not end there. Rubber and plastics are derivatives of crude oil, play a significant role in the production of cars, and form around 15-25% of the raw material basket depending on the vehicle category, as per Nirmal Bang. Crude-linked input costs can also force companies to hike car prices.  End

 

Edited by Avishek Dutta

 

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