The Race For India’s No.2 Carmaker; Olectra’s ‘Maha’ Trouble

Still, conversations with industry watchers and analysts reveal there are several variables at play to arrive at a clear No.2 to Maruti Suzuki India Ltd.

“Every OEM (original equipment manufacturer) has their target segments across fuel types,” Puneet Gupta, director at S&P Global Mobility (India & ASEAN), told NDTV Profit. “There are a lot of unknowns which will keep the market share fluctuating among the three OEMs.” 

This story, then, is an attempt to unravel those unknowns.

Still, conversations with industry watchers and analysts reveal there are several variables at play to arrive at a clear No.2 to Maruti Suzuki India Ltd.

“Every OEM (original equipment manufacturer) has their target segments across fuel types,” Puneet Gupta, director at S&P Global Mobility (India & ASEAN), told NDTV Profit. “There are a lot of unknowns which will keep the market share fluctuating among the three OEMs.” 

This story, then, is an attempt to unravel those unknowns.

In the fiscal ending March 31, 2025, sports utility vehicles (27,97,229 units) outsold small cars (13,53,287 units) two to one, underscoring the outsized demand for oversized vehicles in the world’s third-largest car market. 

M&M has been the biggest beneficiary of this “SUV-fication”, with sales growing by nearly a fifth every month, even as the wider industry lagged with low single-digit growth. Sure, Tata Motors and Hyundai India have a well-diversified SUV line-up at Rs 10-25 lakh, but the lack of new nameplates is showing in their volumes.

The Corporate Average Fuel Efficiency III norms, which come into effect in 2027, can rework the pecking order in India’s car industry. That Delhi—a key geography for SUV sales—has pushed back against diesel is yet another unknown for a company like M&M.

• CAFE III aims to reduce carbon dioxide emissions from cars in India, leading to a shift towards environment-friendly vehicles. Meaning, OEMs will need to have a certain number of vehicles powered by electric, hybrid or CNG powertrains.

“Mahindra has large SUVs (which sell) but 80% of their portfolio is diesel, and that’s a risk, with an evolving policy picture,” S&P Global Mobility’s Gupta said. “With CAFE-III and Cafe IV coming in, Mahindra needs to derisk quickly.”

Amid all the bragging rights that come with being India’s second-largest carmaker, unit sales without revenue growth mean precious little. A higher average selling price means higher margins—and that, at the end of the day, is the deciding factor.

The May Outlook: The Indian automobile sector is expected to present a mixed demand picture for May 2025, according to Yes Securities. While two-wheelers and tractors are poised for positive growth, the commercial vehicle segment is likely to remain flat, and passenger vehicles are likely to experience a decline.

Build Your Dreams, Cheaper: BYD offered discounts on 22 of its electric and plug-in hybrid models that it sells in China until the end of June, fanning the flames of a renewed sector-wide price war. While EV sales have overall reached new annual highs, growth has been decelerating.

Bajaj Auto’s KTM Takeover: The Netherlands-based, wholly-owned subsidiary of Bajaj Auto Ltd. has entered into a "call option" agreement with Pierer Konzerngesellschaft mbH (PIKO) and Pierer Industrie AG to buy their stakes in a complex holding structure for KTM. That would end Stefan Pierer’s three-decade-long association with the Austrian bikemaker that is facing bankruptcy proceedings.

The order book of Olectra Greentech Ltd. has effectively halved after the Maharashtra government terminated a contract for the supply of 5,150 electric buses.

Maharashtra’s Transport Minister Pratap Sarnaik decided to cancel the order during a meeting of the Maharashtra State Road Transport Corporation on Monday.

“The company concerned has been inactive in supplying 5,150 electric buses, and the meeting directed that action should be taken to cancel the tender agreement signed…,” Sarnaik said in a post on X, formerly Twitter.

Olectra denied receiving any such cancellation order, but Sarnaik told NDTV Profit that a termination notice would be served to the company in a couple of days.

On May 28, 1937, Volkswagen AG was founded in Berlin, Germany.

The German government, controlled by Adolf Hitler’s Nazi Party, established a state-owned automobile firm, initially named “Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH” (Company for the Preparation of the German Volkswagen Ltd.). Later that year, it was renamed Volkswagenwerk, meaning “The People's Car Company”.

The foundation of Volkswagen was driven by the vision of creating affordable and reliable vehicles for the masses, which eventually led to the iconic Volkswagen Beetle.

That’s all from us this week. Read more of our stuff at www.ndtvprofit.com/auto.

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