Auto Sales Momentum Continues in Q4 FY26 Amid Cost Pressures

Indian auto makers sustained strong volume growth in Q4 FY26, driven by festive demand, lower loan rates, and export strength, though rising input costs pose margin challenges. M&M led with a 21% YoY sales rise to 301,455 units, fueled by SUVs like XUV7XO, Thar, and electric models BE 6 and XEV 9E. Tata Motors Passenger Vehicles surged 37%, supported by record EV sales (up 69% to 27,000 units), especially Nexon and Punch. Maruti Suzuki posted 11.8% growth to 676,209 units, powered by a 61% jump in exports, despite a 4% domestic dip in small car sales amid consumer caution due to global tensions. Hyundai India grew 8.7%, with exports up 9.4% and record domestic quarterly sales of 1.67 lakh units, aided by new Verna and Exter models. However, rising raw material costs — aluminium up ~20% YoY and steel by ~10% — are pressuring margins. Maruti’s standalone operating margin fell to 11% in Q3, while M&M’s held steady at 14.7%. To counter this, automakers have announced price hikes of up to 2% from April 2026, following earlier increases in January. Going forward, near-term demand remains resilient, but geopolitical uncertainty and cost inflation could weigh on profitability. Companies with strong premium and export portfolios — like Tata and M&M — appear better positioned, while players reliant on entry-level segments face headwinds. The sector’s ability to pass on costs and sustain EV momentum will be key to future performance.