Maruti Q3FY26 Profit Up 4%: Losing Grip on India’s Car Market?

If you grew up in India, there’s a good chance your family’s first car proudly wore a Maruti Suzuki badge.

For decades, Maruti cars were everywhere, and its market share was the envy of the world’s fourth-largest automobile market. At its peak, the company controlled nearly half of India’s passenger vehicle (PV) market, a level of dominance few global automakers have ever achieved.

But that grip has visibly softened.

In recent years, Maruti’s share of India’s PV market has slipped below the 40% mark, a notable decline from around 50% in 2020.

Analysts point out that the erosion hasn’t come from a collapse in sales, but rather from rivals gaining ground especially in the fast-growing SUV segment.

Even today, Maruti continues to lead the industry in absolute volumes, but the shift in market share makes one thing clear: India’s competitive landscape has changed and it has changed quickly.

Even though Maruti still leads in overall volumes, this shift shows the competitive landscape has changed and fast. And there are broadly 2 major reasons for the losing market share, which we’ll list down in the article.

That evolving market dynamic is reflected, to some extent, in Maruti’s recent financial performance.

In Q3, the country’s largest carmaker reported a 3.7% year-on-year rise in net profit to ₹3,794 crore, compared with ₹3,659 crore in Q3FY25. Revenue from operations surged 28.7% YoY to ₹49,892 crore, driven by higher volumes and better realisations.

Maruti clocked its highest-ever quarterly domestic sales of 564,669 units as compared to 466,993 units in Q3 the previous year, an increase of 97,676 units. This was due to the GST reform that slashed the tax rate on small cars from 28% to 18%, making them more affordable.

Operating performance also improved, with EBITDA rising 10% YoY to ₹5,572 crore. However, this came with a trade-off. EBITDA margins slipped to 11.2% from 13%, reflecting higher input and operating costs. As a result, despite strong topline growth, the quarter was largely in line to marginally below analyst expectations, with margin compression weighing on sentiment.

Beyond quarterly numbers, however, a much bigger structural shift is underway.

India’s passenger vehicle market is no longer defined by small hatchbacks and compact sedans. SUVs and utility vehicles have taken centre stage.

In the calendar year 2025, SUVs and UVs accounted for over half (55.8%) of all passenger vehicle sales, marking a dramatic change in consumer preferences.

There are practical reasons behind this shift. While roads have improved, speed breakers, waterlogged streets, and broken patches remain part of daily driving. SUVs offer higher ground clearance, better road visibility, and the confidence to navigate rough conditions without constantly worrying about scraping the underbody.

At the same time, Indian families tend to travel together. Taller seating, more headroom, and larger boots make SUVs better suited for family use, especially for long trips.

In short, SUVs make buyers feel good.

But for carmakers, the appeal goes beyond emotion. The SUV boom has turned out to be a margin story.

Automakers quickly realised they could charge a premium simply by branding a vehicle as an “SUV.” Many crossovers share platforms and engines with hatchbacks, yet sell for ₹1–2 lakh more.

Crucially, Indian consumers despite being price sensitive have shown a willingness to spend ₹20 lakh or more for the right product. Models like the Mahindra Thar and Scorpio-N proved that a rugged, powerful, made-in-India SUV can command a premium if it delivers on design, capability, and road presence.

For a long time, however, Maruti’s SUV presence remained limited.

While rivals like Mahindra and Tata Motors aggressively expanded their utility vehicle portfolios with models such as the XUV 3XO, XUV 7XO, Nexon, and Sierra..Maruti’s SUV lineup arrived later and with fewer differentiated offerings.

Models like the Fronx (built on the Baleno platform), Grand Vitara, and Invicto helped close the gap, but by then, SUV buyers had already begun looking elsewhere.

As a result, even though Maruti’s overall sales continued to grow, its share of the expanding SUV-led market shrank, dragging down its overall PV market share.

Another major disruption has been electric vehicles (EVs).

Competitors such as Tata Motors embraced EVs early, pushing electric sales aggressively and building ecosystems around charging, service, and financing.

Maruti, in contrast, chose a more cautious route, doubling down on CNG and hybrids, while entering EVs gradually with late launches like the e-Vitara. Management has repeatedly cited concerns around battery costs, affordability, and mass market readiness.

While this balanced approach reduces risk, critics argue it may be too slow in a market where EV adoption is accelerating.

This matters because the overall market itself is expanding rapidly. India’s passenger vehicle market grew 20.6% YoY to a record 1.28 million units in Q3 FY26, its strongest Q3 ever. According to SIAM, the surge was driven by policy support, easier financing, and festive demand.

Maruti is selling more cars but the market is growing even faster, which explains why its slice of the pie has narrowed.

Maruti’s market growth versus market share

Importantly, the narrative isn’t one of collapse. Maruti Suzuki ended December 2025 on a record high, clocking its highest-ever monthly sales across both wholesale and retail channels.

• Wholesale dispatches hit an all-time high of 2,17,854 units, up 22% YoY, supported by strong domestic demand, exports, and OEM supplies.
   
• Retail sales also set a December record at 2.86 lakh units, with dealer inventories at a lean three days.
   
• Pending bookings stood at nearly 1.75 lakh units, signalling sustained demand momentum.

These numbers underline a key point: Maruti is not struggling to sell cars, it is operating in a market that has outgrown its traditional strengths.

Maruti is phenomenal at making affordable small cars but the market is shifting toward SUVs and electrification, areas where it traditionally lagged. However, Maruti still holds strengths that rivals don’t always match:

It has the largest service network in India (deep reach even in small towns) and strong brand trust and resale values.

In fact if you look at the export numbers, Maruti’s exports now account for ~45.4% of India’s PV exports. FRONX became the fastest SUV from India to cross 100,000 exports, Jimny 5-door crossed 100,000 cumulative exports, and management expects exports to beat the 400,000 unit FY26 guidance.

Hyundai is a distant second at ~18-25% share, roughly half of Maruti’s export scale. Tata Motors and Mahindra remain marginal exporters, each with sub 5% shares and limited volumes, underscoring Maruti’s clear dominance in India’s PV exports.

But Maruti isn’t standing still.

The company has outlined an ambitious investment roadmap of nearly ₹70,000 crore through FY31, aimed at regaining market leadership by 2030. As part of this strategy, eight new SUV models are planned to strengthen its presence in high-growth segments.

At the same time, Maruti continues to lead India’s CNG market and is steadily integrating hybrid technology across its portfolio, keeping affordability and running costs at the centre of its strategy.

So, will Indian buyers wait while Maruti plays the long game? Or have competitors already won the hearts and wallets of a new generation of car buyers?

The answer will shape not just Maruti’s future, but the next decade of India’s auto market.