How Mahindra Rose to Become India’s Second Biggest Carmaker

Mahindra has surpassed Hyundai to become India’s second largest carmaker, driven by its SUV-first strategy, compact innovation, and sharper manufacturing execution.

From Underdog to Market Leader

Just two decades ago, India’s roads were dominated by hatchbacks and sedans, with Maruti Suzuki and Hyundai setting the pace. SUVs were rare, and homegrown companies like Mahindra and Tata Motors were seen as players in niche categories of trucks, tractors, and rugged vehicles. Fast forward to 2025, Mahindra has become India’s largest SUV manufacturer and the country’s second biggest carmaker overall, marking a milestone shift in consumer preferences and the company’s evolution.

The SUV Turning Point

The real transformation began when SUVs became aspirational symbols of status, safety, and presence. At the same time, compact SUVs blurred the lines between small cars and larger utility vehicles, making them attractive to India’s middle class. Mahindra’s portfolio, already SUV-heavy, was perfectly aligned with this change in demand. Cars like the XUV3XO, under four metres in length, benefited from lower taxes while offering SUV appeal. Sales of this model alone more than doubled in a year, proving the strength of Mahindra’s SUV-first approach.

Policy and Market Tailwinds

Government regulations also worked in Mahindra’s favour. With stricter Corporate Average Fuel Efficiency norms, automakers had to balance large vehicles with more fuel-efficient ones. For companies like Maruti and Hyundai, this meant added pressure. Mahindra, however, leaned into electric vehicles and compact SUVs, aligning seamlessly with both policy and demand. By Q1 FY26, Mahindra’s market share was cemented at 27 percent, with SUV sales leading the charge.

A Full SUV Portfolio

Unlike competitors, Mahindra covered the SUV spectrum comprehensively. From rugged models like the Thar, to family-focused SUVs like the XUV700, and entry-level options like the XUV3XO, the brand had a product for every customer type. This breadth of choice gave it an edge, while competitors’ compact SUVs often felt like hatchbacks rebranded as SUVs.

Strategy and Execution

Mahindra’s strategy went beyond product. The company tackled its production bottlenecks, reducing wait times for popular models from nearly two years to just a few months by adopting lean manufacturing practices such as Single Piece Flow. This increased efficiency and ensured demand could be met without losing customers to competitors. In FY25, Mahindra reported a 24 percent jump in net profit, powered by its SUV portfolio and strong tractor sales.

Shaping the Future with EVs

Looking ahead, Mahindra is betting big on electric mobility. Models like the BE.6 and XEV 9e have already seen strong demand, with more than 12,000 units sold within months of launch. The NU_IQ platform is designed to power both electric and internal combustion vehicles, allowing the company to capture more of the compact SUV segment in the years to come.

A Shift in Indian Car Culture

Mahindra’s rise is not just a company story, it reflects how India’s car market has evolved. SUVs now account for 65 percent of passenger vehicle sales, a massive shift from just a decade ago when they made up barely one fifth of the market. Mahindra’s ability to align with this cultural and economic shift has cemented its place as one of India’s most influential automakers.

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