A few years ago, Cuttack-based Abhishek Majumdar was looking to buy a mid-sized car. He test-drove four cars — Maruti Suzuki Baleno, Tata Nexon, Tata Altroz and Tata Punch. While the Nexon scored on power with its turbo charged engine, it was costlier. Majumdar settled for the Punch, drawn by its price, space, global NCAP 5-star rating and mileage.
He has since driven to Burdwan in West Bengal and even distant Chennai, logging over 11,000 km; on some stretches, the manual shift car registered around 23 km to a litre. “The features are value for money. The AC and sound system stand out, the steering is slick and responsive, and the controls are neatly laid out. Overall, it’s a comfortable city car that holds its own on the highway if driven below 100 kmph,” says Majumdar.
Like Majumdar, thousands of new car buyers have voted with their feet for Tata Motors’ compact sport utility vehicle (SUV) Punch, which has emerged as the best-selling utility vehicle (UV), dethroning Maruti’s long-reigning Wagon R, Brezza and Ertiga.
Tata Punch sales have crossed half a million units since launch in October 2021, including 2.02 lakh in 2024. Behind it were Maruti Wagon R (1.91 lakh units), Maruti Ertiga (1.9 lakh), Maruti Brezza (1.88 lakh), and Hyundai Creta (1.87 lakh). Once Maruti’s bestseller, Swift trailed in sixth position with 1.73 lakh units in CY24.
Formidable challenge
Can Maruti, the undisputed leader of the Indian passenger vehicle market, withstand the formidable challenge from emerging players, amid evolving preferences?
Post Covid, SUV sales surged, particularly in the compact segment, as new models rolled into the market. On the other hand, the pandemic dampened sentiment among cash-strapped small car buyers; significant price hikes led to deferred purchases and upgrades.
Today, the UV market — encompassing SUV, multipurpose vehicle (MPV) and multi-utility vehicle (MUV) — is twice the size of the passenger car segment. In the current fiscal, UV sales touched 22.6 lakh units in the first 10 months, compared to 20.2 lakh a year ago. Conversely, passenger car sales fell from 12.8 lakh units to 11.03 lakh.
Maruti Suzuki continues to lead the UV segment with 25 per cent market share (9MFY25), followed by Mahindra & Mahindra (20 per cent), Tata Motors (16 per cent), and Hyundai (15 per cent). Maruti’s expanded SUV line-up — including the Fronx and Jimny — boosted its segment share, which was just 11 per cent in FY 21-22.
As manufacturers launch new models to cash in on the rising preference for SUVs, Tata Motors has emerged as a dominant force in the compact SUV category, propelled by Nexon and Punch, in particular.
Scoring on safety
Tata Punch — available in petrol, electric and iCNG variants — caters to a diverse cross-section of Indian consumers. Like its counterparts with internal combustion engines, the electric variant — Punch.ev — has been a success, offering premium features. It also excels in safety, securing a GNCAP 5-star rating with the highest adult occupant protection score, says a spokesperson of Tata Motors.
According to Puneet Gupta, Director at S&P Global Mobility, Tata Punch’s success stems from its diverse powertrain options and strong value proposition in design, performance and features. “Mahindra is aggressively competing for the No. 2 position. However, Maruti Suzuki still enjoys an advantage in the small and sub-compact car segments, even as India’s car ownership rate of 36 per 1,000 people signals substantial growth potential,” he adds.
While Tata’s Punch continues to lead in UV sales, Mahindra has secured a strong second position by introducing a diverse line-up of features-rich SUVs, surpassing Tata Motors in UV volumes. Meanwhile, Tata and Hyundai continue to compete closely for the third spot.
“As the SUV segment grows increasingly competitive, automakers are focusing on innovative designs, advanced technology and leveraging their strengths — including extensive dealer networks, strong brand recognition and localised manufacturing — to gain a competitive edge,” notes Ashim Sharma, Senior Partner and Group Head at Nomura Research Institute Consulting & Solutions India.
Market reports say Maruti may face challenges in gaining a significant market share in only two UV sub-segments, which together contribute 10 per cent. In most other segments, it is likely to overtake its competitors, either through existing models or new launches. It plans to introduce six new SUV models over the next 3-4 years.
Electrifying pace
Meanwhile, the rising preference for electric mobility is further intensifying competition, with leading players rolling out electric SUVs. At the recently concluded Bharat Mobility Global Expo 2025 in New Delhi, electric vehicles (EVs) dominated nearly 50 per cent of new launches, including Maruti’s e-Vitara, Hyundai’s Creta Electric, and Tata’s Harrier.ev and Tiago.ev.
“The launches are expected to drive the democratisation of the segment, expanding its appeal beyond early adopters to mainstream buyers,” says Gaurav Batra, Associate Director and Automotive Insights Lead at EY.
Maruti Suzuki’s first EV, e-Vitara, promises over 500 km range and is set for launch in the latter half of this year. CEO and MD Hisashi Takeuchi has said the company targets building a sustainable EV model by achieving scale and market dominance.
“Electric variants of popular models in the ₹15-25 lakh bracket would catalyse the market,” explains Batra.
While Tata Motors continues to lead India’s electric PV sales, MG Motor is in second place with the success of its electric SUV MG Windsor. Meanwhile, Mahindra & Mahindra secured over 30,000 bookings for its electric SUVs, the XEV 9e and BE 6, on day one. This is notable, as India’s electric PV sales in 2024 were around one lakh units.
Pivotal moment
Maruti Suzuki’s prowess in cost-efficiency and largescale operations is expected to make EVs commercially viable and competitive. “Maruti’s foray into BEVs (battery electric vehicles) will drive supplier investments, enhance confidence in the segment and spur advancements in new technologies,” S&P’s Gupta notes.
This is also set to further escalate competition in the PV market. However, the company is simultaneously advancing a multi-fuel technology strategy, not only to align with emission reduction goals but also maintain its presence in the alternative fuel segment. Its share of CNG PVs rose to 24 per cent in FY24 (4.5 lakh units), with an anticipated 6 lakh units in FY25. Further, it has introduced strong hybrid models, such as the Grand Vitara and Invicto, in partnership with Toyota, and plans cost-effective hybrid technology for entry-level models.
With its vast distribution network, diverse product portfolio, and other advantages, Maruti Suzuki may present significant challenges to emerging competitors, particularly in the SUV segment.