How Mahindra became India’s 2nd biggest carmaker

In today’s episode on 1st September 2025, we talk about how Mahindra became India’s biggest SUV company and also the 2nd biggest car maker.

• 0:00Speaker 00

  Hello folks, you're listening to Finshots Daily. In today's episode, we talk about how Mahindra became India's biggest SUV company and also the second biggest carmaker.

• 0:11Speaker 00

  Before we begin, here's a quick word from team Ditto. Life has a way of surprising us and not always in a good way. Sometimes it's a sudden illness or an unexpected hospital visit that can shake up everything. In India, families still pay about thirty-nine percent of medical expenses directly from their own pockets and just one hospital stay can wipe out years of savings. The easiest way to protect yourself is by getting a good health insurance plan. It's way cheaper than footing one huge bill. And if you're unaware where to start, book a free call with Ditto. No spam, just honest, jargon-free guidance. Trusted by over eight lakh people for their health and term insurance needs. The link is in the description. Now, back to the story. Just twenty-five years ago, Indian roads looked very different.

• 0:55Speaker 00

  And by Indian roads, we mean the cars that drove on them. It was either a hatchback or sedan and rarely an SUV. And even those hatchbacks were mostly made by either Maruti Suzuki or Hyundai India. These companies became household names in the car market by capitalizing on one standard belief. India was the land for small cars. And because of that, homegrown carmakers like Mahindra and Tata Motors, who were largely into SUVs, trucks and tractors, struggled to rise through the ranks. But, things are flipped. In Feb this year, Mahindra took the second spot outdoing Hyundai in terms of overall domestic vehicle sales. And by Q1 FY26, the trend was cemented.

• 1:36Speaker 00

  Mahindra sold 1.52 lakh SUVs out of 2.47 lakh total vehicles. Now, that's a twenty-seven percent revenue market share. Meanwhile, Hyundai's total sales slipped to 1.8 lakh units, down from 1.92 lakh a year earlier. And its SUV sales slipped from 1.01 lakh to ninety thousand five thirty-one units. So, how did Mahindra capture the SUV market better than anyone else? Well, it comes down to three things. The turning point, the numbers and the strategy. We'll start with the turning point for cars in India. Look, owning an SUV is seen as a status symbol. It has a stronger presence on roads, safer to drive, and the ideal choice for India's aspirational goals.

• 2:19Speaker 00

  Plus, what we're seeing isn't just the rise of the SUV market, but also decline in the hatchback and sedan segment. And the entry point to this segment is something unique to India, the compact SUV. It has blurred the lines between hatchbacks and SUVs, which makes Mahindra's SUV-first approach on par with where the market was moving. Plus, there's a tax twist. In India, SUVs longer than four meters attract a higher GST plus S. But because compact SUVs fall just shy of four meters and engine smaller than 1200cc, they're comfortably taxed lower. That's why cars like Mahindra's XUV3XO that are less than four meters are such a hit among customers.

• 3:00Speaker 00

  It's one of the best-selling cars in the fleet, which saw sales rise from 54,726 units in FY24 to 1 lakh 9.5 units in FY25 in a year. So, yes, with Mahindra already being a SUV-first company, the shift played right into its hands. It's a space that automakers are competing for aggressively. And Mahindra plans to build on its success with the NUIQ platform, which will allow it to capture more of the compact SUV segment by using the platform for both its electric as well as internal combustion engine vehicles. Oh, and there's also a policy advantage that worked in Mahindra's favour. India has tightened the fuel economy standards for cars through CAFE or Corporate Average Fuel Efficiency Norms. The idea was simple.

• 3:44Speaker 00

  An automaker can sell big, heavy fuel-consuming SUVs if it wants, but it has to balance them with smaller, more fuel-efficient cars so that it averages across all cars sold in a year, doesn't cross the government's set limit for CO2 emissions. Now, because of this, smaller carmakers like Maruti Suzuki and Honda India were caught in a twist. But for Mahindra, an SUV-heavy portfolio meant less effort to balance CAFE scores and focus on EVs. Now, the numbers that tell the biggest story. Of the total 4.3 million cars dispatched in India in FY25, of the total 4.3 million cars dispatched in India in FY25, 2.79 million cars were SUVs and MPVs, that is, multipurpose vehicles.

• 4:28Speaker 00

  That's 65% of the market and a huge shift in preference from a decade ago, when SUVs made up 21% of all passenger car sales. So, carmakers with non-SUV portfolios saw themselves on the wrong side of the shift. Sure, they released their own compact SUVs, but for customers, they still felt like a hatchback trying to be an SUV. Mahindra, on the other hand, was able to capitalize on this shift in demand by offering more options, like the Scorpio N, TARD, that's the rugged SUVs for adventure seekers, XUV 3XO, which is an entry-level SUV, and XUV 700, that's for a larger family. Now, that's an option for every type of customer across the SUV ladder, all from one manufacturer.

• 5:11Speaker 00

  And how did it pull off all this while its competition played catch-up? This strategy sealed the deal. Mahindra didn't just build a range of SUVs, but also backed that up with execution. Not long back, they had issues on the assembly line because of which some models had waiting periods of nearly two years after booking. Now, that's a lot of time to wait for a car and it gives customers enough time to go window shopping for the next best option. So, Mahindra reduced it by upping their production capacity. Some cars like the XUV 700 had wait times of one to two years, now reduced to one to five months or less based on the variant. It achieved this by adopting a manufacturing method called "single-piece flow", that's a lean manufacturing method that boosts efficiency by increasing productivity,

• 5:55Speaker 00

  reducing waste and shortening production lead time. And it shows in the results. In the recent quarter, the company's net profit soared by 24% to ₹4,083 crore, driven up by margins from SUVs and tractors. And now, Mahindra is pushing into EVs. Its B6 and XUV 9E have already sold more than 12,000 units within months of launch, showing strong demand. So, yes, Mahindra's rise to India's second-largest carmaker isn't just luck, it's the result of spotting a shift, sticking to its strengths and doubling down on what customers actually wanted. And maybe, this isn't just Mahindra's win, but a telling milestone of how India's car preferences have shifted gears over the years.

• 6:39Speaker 00

  Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.