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Tata Motors, in its recent earnings call, confirmed plans to hike prices in the fourth quarter, while sources suggest Mahindra & Mahindra may also do the same in February 2026.
Maruti Suzuki, which has about 40% share in the passenger vehicle market, and Hyundai India, which has about 14% share, have not announced any price revisions yet.
However, luxury brands are going ahead with price adjustments effective from January 1, 2026: Mercedes-Benz will raise prices by 2%, BMW by 3% and MG Motors by 2%. Volvo prices are also expected to increase during the same period.
Major internal combustion engine (ICE) two-wheeler manufacturers have not yet taken any decision on increasing prices. However, Ather Energy, one of the leading electric two-wheeler (e2W) players, has announced a price hike of up to ₹3,000 on its scooters, citing rising production costs.
Industry analysts believe the expected hike was driven by the impact of rupee depreciation on imported components as well as higher input costs for steel, aluminium, electronics and batteries.
An industry analyst said, “With costs rising across the board, gradual price adjustments are necessary to protect margins. While passenger demand remains strong, manufacturers need to balance affordability with sustainable operations.”
Price increases are expected to be incremental and, although they may increase the total cost of ownership, the sector is confident that demand will remain stable, especially for popular models and electric offerings.
Registration data from the VAHAN website shows that the passenger vehicle segment is growing by 14% and the two-wheeler segment by about 4%. Between April and December 2025, registrations of four-wheelers increased by about 15%, while two-wheelers increased by about 18%.
If the industry maintains the current December growth rate, the implied growth for Q4 FY26 to meet the targeted FY26 projections will be 8% for two-wheelers and -3% for four-wheelers.
According to Elara Securities, growth is estimated at 9% for two-wheelers and 5.5% for four-wheelers in FY26, with a potential upgrade for the passenger vehicle segment expected.
While price hikes may lead to a marginal increase in ownership costs, the strong demand trajectory and sustained growth momentum in both passenger vehicles and two-wheelers indicate that the Indian auto sector is well positioned to sustain growth in FY26 despite rising input pressures.