India’s automobile industry has marked a stellar performance in the first quarter of fiscal year 2025-26 (April-June 2025), with exports surging by 22% year-on-year, reaching a total of 1,457,461 units compared to 1,192,566 units in the same period last year. This robust growth, driven by record-breaking passenger vehicle (PV) shipments and strong demand for two-wheelers, commercial vehicles, and three-wheelers, underscores India’s growing stature as a global automotive manufacturing hub.
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Passenger vehicle exports reached an all-time high of 204,330 units in Q1 FY26, registering a 13% increase from 180,483 units in the corresponding period of FY25. This growth was fueled by consistent demand across key global markets, with significant contributions from regions such as the Middle East, Latin America, and Japan. Free Trade Agreements (FTAs) with countries like Australia have further bolstered export momentum, enabling Indian manufacturers to penetrate new markets effectively.
Maruti Suzuki India Limited, the country’s largest carmaker, led the passenger vehicle export segment with a commanding 47% market share, shipping 96,181 units—a 37% increase from 69,962 units in Q1 FY25.The company’s strong performance is attributed to models like the Fronx, Baleno, Swift, Dzire, and Jimny, which have gained traction in markets such as Japan, Chile, Saudi Arabia, and Mexico. Maruti Suzuki’s export volumes grew significantly while the rest of the industry faced a 2% decline, reinforcing its dominance in both domestic and international markets.
Hyundai Motor India also contributed significantly, exporting 48,140 units, a 13% rise from 42,600 units in the same quarter last year. The company’s focus on markets like Saudi Arabia, South Africa, Mexico, Chile, and Peru has strengthened its position as a key exporter. Other manufacturers, including Nissan, Honda Cars India, and Volkswagen, also featured among the top exporters, though their volumes were comparatively smaller.
Two-wheeler and commercial vehicle segments shine
The two-wheeler segment saw a 23% rise in exports, with shipments climbing to 1,136,942 units from 923,148 units in Q1 FY25. This growth was driven by increasing demand for Indian motorcycles and scooters in developing regions of Asia, Africa, and Latin America. Motorcycles, in particular, saw a 22.9% increase in export volumes in April 2025 alone, reflecting the competitive pricing and quality of Indian two-wheelers. Major players like Bajaj Auto, Honda Motorcycle & Scooter India, TVS Motor Company, and Hero MotoCorp have been instrumental in this upsurge, with Bajaj Auto maintaining its position as the top two-wheeler exporter.
Commercial vehicle exports also grew by 23%, reaching 19,427 units in Q1 FY26. This segment benefited from a revival in global demand, particularly for buses and light commercial vehicles, driven by increasing needs in public and institutional transportation. Three-wheeler exports recorded the highest growth rate among all segments, surging 34% to 95,796 units, with Bajaj Auto commanding a 57% market share in this category. The strong performance across these segments highlights the diversified strength of India’s automotive export portfolio.
Strategic factors driving export growth
Several factors have contributed to India’s robust export performance in Q1 FY26. Stable global demand, particularly in emerging markets, has been a key driver. The Middle East and Latin America have shown strong appetite for Indian vehicles, while recovering markets like Sri Lanka and Nepal have added to the momentum. Additionally, FTAs with countries like Australia have facilitated increased shipments by reducing trade barriers.
Maruti Suzuki’s strategic focus on exports as a buffer against domestic market slowdowns has proven effective. The company aims to export 400,000 units in FY26, targeting a 50% market share in the export segment. This ambition aligns with the Indian government’s goal to enhance global automotive trade, with manufacturers like Maruti Suzuki and Hyundai investing heavily to expand production capacities for export markets. Maruti Suzuki’s planned investment of ₹45,000 crore to double its production capacity to 4 million units by 2030, with 750,000-800,000 units earmarked for exports, underscores this commitment.
Challenges and outlook
Despite the export surge, the domestic market faced challenges in Q1 FY26, with passenger vehicle sales dipping by 1.4% to 1,011,882 units. Rising costs due to stricter regulatory norms and affordability issues in the entry-level segment have impacted domestic demand, particularly for passenger cars and hatchbacks. However, the resilience of utility vehicles and the export market’s strength have mitigated these challenges. Analysts predict moderate domestic growth in FY26, driven by rural demand revival, new model launches, and favorable fiscal policies.
The Indian automobile industry’s export performance in Q1 FY26 reflects its growing global competitiveness. With Maruti Suzuki leading the charge and other manufacturers like Hyundai and Bajaj Auto contributing significantly, India is poised to strengthen its position as a global automotive hub. As the industry navigates domestic challenges, the export market’s robust growth offers a promising outlook for FY26, supported by strategic investments and favorable trade agreements.
