Sales of passenger vehicles continued to move in top gear in December, as three out of the four listed car manufacturers reported double-digit growth in dispatches. The growth was driven by higher demand for compact SUVs, healthy discounts, a sentiment boost following GST rate cuts, and a strong marriage season, helping the industry finish the year on a solid note.
Amid continued demand for SUVs, Mahindra & Mahindra dispatched 50,946 units (domestic) in December 2025, compared with 41,424 units in the same month of 2024, reflecting a growth of 23%, as per the company’s regulatory filing on Thursday, January 1.
With this, the company retained its position as the second-largest PV maker in the domestic market.
Maruti Suzuki, the country’s largest PV maker, reported a 22.21% rise in total sales at 2,17,854 units (domestic) in December 2025, compared with 1,30,117 units in the year-ago period, the exchange filing showed.
The sales of small cars, defined as petrol models with engine capacity below 1,200 cc and diesel models below 1,500 cc, not exceeding 4 meters in length, which had slowed in recent years, have also picked up momentum following GST rationalisation, making these cars more affordable for budget buyers.
Sales of small cars grew sharply to 14,225 units last month, up from 7,418 units in December 2024. The company’s UV sales, comprising Brezza, Ertiga, Fronx, Grand Vitara, Invicto, Jimny, Victoris, and XL6, jumped 32.64% year-on-year to 73,818 units.
Tata Motors Passenger Vehicles dispatched 50,046 units (domestic) to dealers last month, a 13.1% jump from 44,230 units in December 2024. Its electric vehicle sales remained strong at 6,906 units, showing a growth of 24.2% over 5,562 units in December 2024.
Hyundai Moto India sales further weakened in December as it dispatched 42,416 units (domestic) to dealers, down from 50,340 units in November. On a year-on-year basis, the growth stood at 6.6%, as per Thursday’s filing.
Motilal Oswal sees demand recovery sustaining
Following the GST rationalisation, demand has picked up across segments and appears to have remained intact even after the festive season, said domestic brokerage firm Motilal Oswal in its recent note.
A notable trend is that entry-level vehicles, both two-wheelers (2Ws) and passenger vehicles (PVs), are seeing a marked pickup in demand. Further, wholesales were strong in December, and retail sales were equally healthy across most segments. Thus, OEMs are likely to have ended 2025 with lean inventory.
The brokerage said this lean inventory position would help OEMs sustain volume momentum in Q4FY26 as well. With demand recovering, it expects discounts in the passenger vehicle segment to gradually reduce.
Maruti Suzuki is the brokerage’s top pick in the PV category, as it believes the company’s new launches and current export momentum are likely to drive healthy earnings growth. It also favoured Mahindra & Mahindra, supported by an uptrend in tractor demand and healthy growth in utility vehicles.
In the two-wheeler segment, Motilal Oswal is positive on TVS Motor.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
