Source: HT Auto

Mahindra rise to become India’s third-largest car manufacturer is a noteworthy achievement, especially as the Indian auto industry faces challenging market conditions. This milestone, attained in September 2024 saw Mahindra surpass Tata Motors with impressive growth in its SUV sales, despite an overall industry slowdown. Here’s a detailed look at the factors behind its success and the broader automotive landscape in India.

A Surge in SUV Sales Drives Growth

Mahindra’s ascent can be attributed to the strong performance of its SUV lineup, which includes models like the Thar, XUV700, Scorpio-N, and XUV 3OO. These vehicles have resonated well with consumers, thanks to their rugged design, advanced features, and affordability. In September 2024 alone, Mahindra sold 51,062 SUVs, marking a 24% year-on-year increase in sales. This growth allowed the company to edge past Tata Motors in the domestic passenger vehicle (PV) market, placing it in a stronger competitive position.

The introduction of the Thar Roxx, a variant aimed at off-road enthusiasts is expected to further boost sales. Pre-orders for this model began in October 2024, adding to the company’s momentum. The success of its SUV lineup reflects a growing demand for vehicles that offer a combination of performance, style and utility, appealing to a broad customer base across India.

Tata Motors and Hyundai Motor India in Decline

While Mahindra has experienced growth, other major players like Tata Motors and Hyundai Motor India have seen their sales decline. Tata Motors, previously holding the third spot has been pushed to fourth place as it faces challenges in maintaining its market share. Meanwhile, Hyundai Motor India, the second-largest carmaker in the country, witnessed a 6% decline in year-on-year sales in September 2024, with 51,101 units sold, narrowly surpassing Mahindra by just 39 units.

This decline in sales for Hyundai and Tata Motors is indicative of broader industry trends, where rising interest rates and inflation have dampened consumer demand. The Indian automobile industry has been grappling with fluctuating input costs, supply chain disruptions, and changing consumer preferences, making it harder for many companies to maintain growth.

Industry-Wide Challenges

The entire Indian automotive industry has been affected by a variety of macroeconomic factors including global supply chain disruptions, semiconductor shortages and inflationary pressures. These challenges have led to price hikes and longer delivery times, impacting consumer purchasing decisions. As a result, the overall sales across the automotive industry have seen a decline, making their achievement all the more remarkable.

In response to these market conditions, Mahindra has capitalized on its strengths in the SUV segment, which continues to be one of the fastest-growing segments in the Indian auto market. Consumers have shown a preference for SUVs due to their higher ground clearance, spacious interiors and perceived safety benefits, making Mahindra’s strategic focus on this segment a winning formula.

Leadership and Vision

The leadership of Anand Mahindra, Chairman of the Mahindra Group, has been instrumental in the company’s success. His forward-thinking approach and focus on innovation have enabled the group to consistently improve its product offerings and customer experience. Following the rise to the third spot, Anand Mahindra emphasized the importance of self-improvement, stating on social media that “the only race worth winning is the one you race against yourself” – a reflection of the company’s internal drive to continuously improve.

Mahindra’s success also highlights its ability to adapt to changing market conditions and consumer demands. By investing in R&D, expanding its product portfolio and leveraging its strong brand image, Mahindra has positioned itself as a formidable player in the Indian automotive industry.

Looking Ahead

Now eyeing the second spot in the Indian PV market, the competition between Mahindra, Hyundai and Tata Motors is set to intensify. Mahindra’s near match with Hyundai in sales figures indicates that the company is not far from overtaking its South Korean rival, especially if Hyundai continues to struggle with declining sales.

Mahindra’s rise to become India’s third-largest carmaker is a testament to its strong product lineup and strategic market positioning. Amidst a challenging environment for the broader industry, it’s ability to grow its sales and surpass competitors reflects the company’s resilience and adaptability. As the industry continues to evolve, their success story will serve as a benchmark for other automakers looking to thrive in uncertain times.