Maruti Suzuki saw its contribution to Indian PV retails fall to 38.94% in February from 45.30% in the previous month, according to numbers from FADA, as M&M and Toyota Kirloskar continued to gnaw at its share.
06 Mar 2025 | 1976 Views | By Arunima Pal
In a concerning development for India's long-standing automotive leader, Maruti Suzuki's market share in the passenger vehicle segment plummeted to a two-year low of 38.94% in February 2025, according to data released by the Federation of Automobile Dealers Associations (FADA). This significant decline marks a stark contrast from the company's ...
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In a concerning development for India's long-standing automotive leader, Maruti Suzuki's market share in the passenger vehicle segment plummeted to a two-year low of 38.94% in February 2025, according to data released by the Federation of Automobile Dealers Associations (FADA). This significant decline marks a stark contrast from the company's commanding position just a few years ago when it consistently maintained a market share above 45%.
Shrinking Dominance in a Changing Market
The February figures reveal a troubling trajectory for Maruti, with the company selling 118,149 units during the month, a substantial 10.34% year-on-year decline compared to February 2024. This drop is particularly striking when contrasted with the company's historical market dominance - Maruti had maintained a market share hovering around 50% before the COVID-19 pandemic disrupted the automotive industry in 2020.
"The PV segment, despite a modest 4% YTD growth, suffered a steep 10.34% YoY fall in February," noted FADA President C.S. Vigneshwar in the latest retail report. "Entry-level demand remained particularly soft, with dealers citing delayed conversions and challenging targets."
This weakness in the entry-level segment has hit Maruti especially hard, as the company built its empire primarily on affordable small cars that once dominated Indian roads.
SUV Surge Reshapes the Competitive Landscape
The primary beneficiaries of Maruti's decline have been manufacturers with strong SUV portfolios. Mahindra & Mahindra has emerged as a significant challenger, capturing 13.15% of the market in February 2025, up from 11.74% a year earlier. This growth is driven by robust demand for models like the Scorpio and XUV700, which have resonated strongly with Indian consumers seeking larger, feature-rich vehicles.
Tata Motors, while experiencing a slight year-on-year decline to 12.75% market share in February 2025 from 13.51% a year ago, has maintained a substantially stronger position than it held in the pre-pandemic era. The company's strategic pivot toward SUVs and electric vehicles has helped it establish a solid foothold in segments where Maruti has historically struggled.
Toyota Kirloskar Motor has been another notable gainer, increasing its market share to 7.11% in February 2025 from 6.08% the previous year. The Japanese manufacturer's SUV offerings, including the Urban Cruiser Hyryder and Fortuner, have found favor with Indian consumers looking for reliable utility vehicles.
The SUV Revolution
The shift in market dynamics reflects a fundamental change in Indian consumer preferences. According to FADA data, SUVs now account for more than 50% of the passenger vehicle market, a dramatic increase from around 30% in the pre-COVID era.
This trend has been particularly challenging for Maruti, whose small car-dominated portfolio has struggled to keep pace with evolving consumer tastes. Despite belated efforts to strengthen its SUV lineup with models like the Grand Vitara and Fronx, Maruti continues to lag behind competitors who established strong SUV credentials earlier.
"PV sales saw a robust 14% growth, driven by new model launches and attractive pricing strategies," noted FADA's report on October 2024 sales, highlighting how SUV demand continues to drive market growth. However, Maruti's slow adaptation to this trend has cost the company dearly in terms of market share.
Inventory Challenges Compounding Problems
Adding to Maruti's woes is a persistent inventory problem that has plagued the passenger vehicle segment. FADA has repeatedly flagged concerns about high inventory levels, with stocks reaching 50-52 days in February 2025. This excess inventory represents a significant financial burden for dealers, with FADA urging manufacturers to align wholesale targets with actual retail potential.
The situation was even more dire in September 2024, when PV dealers were sitting on 80-85 days of inventory, amounting to 7.9 lakh vehicles worth ₹79,000 crore. "FADA urges OEMs to take immediate corrective measures to avoid a financial setback," warned FADA at that time, highlighting the unsustainable pressure on the dealer network.
Looking Ahead: Can Maruti Reclaim Lost Ground?
Despite these challenges, Maruti remains the single largest player in India's passenger vehicle market, with its closest competitor, Hyundai, holding just 12.58% market share in February 2025. However, the gap has narrowed significantly, and the combined market share of Mahindra, Tata, and Hyundai now poses a serious threat to Maruti's leadership position.
Industry analysts suggest that Maruti's future hinges on its ability to accelerate its transition toward SUVs while maintaining its stronghold in the small car segment. The company's planned entry into the electric vehicle market, with the e-Vitara expected in late 2025, represents another critical pivot point that could determine its trajectory in the rapidly evolving Indian automotive landscape.
As FADA's February report indicates, the "broad-based downturn across all categories" suggests larger economic factors at play beyond just shifting preferences. With nearly half of dealers (45.28%) anticipating growth in March, there may be an opportunity for Maruti to begin reclaiming lost ground if it can effectively address the fundamental shifts in the market.
For now, however, India's once-undisputed automotive leader finds itself in unfamiliar territory, fighting to maintain relevance in a market it once dominated with ease. The SUV revolution has reshaped India's automotive landscape, and Maruti's ability to adapt to this new reality will determine whether February's two-year low marks a temporary setback or the beginning of a more permanent decline.