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Informist, Friday, Jan. 23, 2026

 

NEW DELHI - The market share of sports utility vehicles inched higher in the December quarter, which saw the full pass-through of the Goods and Services Tax cut, mainly driven by increased preference for compact SUVs, Nomura Global Research said in a note Friday. The share of entry-segment small cars, too, saw an increase after the market leader in this segment, Maruti Suzuki India Ltd., offered extra price cuts over and above the GST rate cut benefits, the firm noted.

 

Nomura had said in a previous note that premium segments such as SUVs, and in particular compact SUVs, will benefit from the tax cut and that hatchbacks were losing share due to a change in consumer preferences and not due to affordability issues.

 

The healthy demand momentum seen in the December quarter has continued in the early part of the March quarter so far. "With key launches such as the MM's XUV7XO, Tata's (Tata Motors Passenger Vehicles Ltd.) Sierra, and Punch facelift taking place in Jan-2026, it is likely that the SUV share might rise further in Jan-Mar 2026," Nomura said. 

 

Even as car sales have continued the healthy traction seen in the latest quarter, commodity inflation has emerged as a possible pressure point. Prices of precious metals have increased 150 basis points between September and January, prompting price hikes by many automobile firms. While Tata Motors PV had said that it would increase car prices at some point in the March quarter, Maruti Suzuki, which has a 41% market share in the passenger vehicle segment, has yet to guide for the same.

 

"While overall demand may not be impacted significantly as the GST reduction has created space for price hikes, entry-segment cars may face more risk, in our view," Nomura said. Maruti Suzuki had cut prices by 9-13% during the festival period in the December quarter, with discounts ranging from around INR 30,000-INR 80,000 for entry-segment cars such as the Alto, S-Presso, and Celerio. A potential reversal of price cuts could impact demand for these cars as customers buying cars at these prices tend to be price sensitive, Nomura said.

 

"MSIL (Maruti Suzuki) gained market share in 3QFY26 by ~200bp q-q to ~41%, supported by hatchbacks and the Victoris launch. However, it remains to be seen whether these gains are sustainable given the other competing launches in Jan-2026," Nomura said. The research firm expects Maruti Suzuki's domestic sales volume to grow 8% on year in 2025-26 (Apr-Mar) and 5% on year in FY27. However, it said the company's recent market share gains could reverse in the March quarter, following multiple car launches by its competitors and if the company hikes prices of its entry-level cars.  End

 

Reported by Anand JC

Edited by Deepshikha Bhardwaj

 

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