Did you know that seven out of every ten Hyundais sold in India last quarter were SUVs? Hyundai Motor India just revealed striking numbers for their July to September 2025 quarter. While SUVs like Creta, Venue, and Exter flew off showrooms, the company faced a reality check. For the first time in years, Hyundai slipped from its long-held second-place position in India's car market. Tata Motors and Mahindra surged ahead with their own SUV lineups. This shift marks a turning point for the Korean automaker that once seemed unshakable in Indian hearts.
What Happened at Hyundai in Q2 FY26?
Hyundai sold 139,521 cars in India during the second quarter of fiscal year 2026. This number dropped by 6.8 percent compared to last year. But here's the twist: SUVs made up 71 percent of those sales, up from 69 percent the previous year.
The company moved 99,220 SUVs between July and September 2025. Rural buyers drove much of this demand, accounting for nearly 24 percent of total sales. In villages and small towns, SUVs grabbed an even bigger 72 percent share of purchases.
Tarun Garg, Chief Operating Officer at Hyundai India, shared these details during their earnings call. According to the report, more than 60 percent of Hyundai buyers are under 40 years old. Young families want spacious vehicles that handle rough roads and offer practical features.
Why Did Overall Sales Drop Despite SUV Success?
We've analyzed the numbers and found three main reasons behind the sales decline:
GST Confusion: India introduced new tax rates on cars during this period. Buyers held back purchases waiting for clarity on prices. Rural customers, who watch every rupee closely, delayed buying decisions the most.
New Model Timing: The Hyundai Venue update launched on November 4, 2025. Many potential buyers waited for the new version instead of buying the older model during the quarter.
Competition Heat: Tata and Mahindra rolled out aggressive pricing and feature-packed SUVs. Models like Tata Nexon, Punch, and Mahindra Scorpio N pulled customers away from Hyundai showrooms.
Garg called it a "transformative quarter" for the industry. Wholesales numbers tell the story. Dealers ordered fewer cars because showroom traffic slowed down during the tax uncertainty period.
The Diesel Comeback Story
Something unexpected happened. Diesel cars made a comeback, grabbing 23 percent of Hyundai's sales in Q2 FY26. In our observation, this trend contradicts what many experts predicted five years ago when they declared diesel dead.
Rural buyers love diesel engines for good reasons:
• Better fuel economy on long highway drives
• Lower running costs over time
• More torque for carrying heavy loads
• Proven reliability in tough conditions
Models like Creta and Venue offer diesel options that appeal to farmers, small business owners, and families in smaller cities. These buyers cover thousands of kilometers monthly and calculate every paisa spent on fuel.
Export Business Shines Bright
While domestic sales struggled, Hyundai's export game stayed strong. The company shipped 51,400 vehicles from India to other countries, marking a 21.5 percent jump from last year.
Where did these cars go?
The Middle East and Mexico topped the list. Venue and Aura sedans proved popular in Middle Eastern markets. South Africa bought loads of Grand i10 Nios hatchbacks. Even the three-row Alcazar SUV found buyers abroad.
We've checked Hyundai's export strategy and it makes smart business sense. Indian manufacturing costs stay competitive globally. The company uses its Chennai plant as an export hub, shipping cars to over 88 countries worldwide.
Garg expressed confidence about exceeding their full-year export targets. Strong global demand cushions the blow from slower home market sales.
Money Matters: Profitability Stays Health
Hyundai earned Rs 24,289 million in EBITDA during Q2 FY26. That's earnings before interest, taxes, depreciation, and amortization. In simple terms, it shows how much money the core business makes.
How did they maintain profits despite lower sales? Garg revealed their strategy: Hyundai refused to join the discount wars. When competitors slashed prices during the GST confusion, Hyundai held steady. This discipline protected their profit margins.
According to a report by the company, three factors boosted profitability:
• Higher export volumes with better margins
• Focus on selling higher-priced SUV models
• Smart cost optimization across operations
The Second Place Problem
Here's the hard truth Hyundai faces. After holding the number two spot in India's passenger vehicle market for decades, they've lost it. Tata Motors and Mahindra & Mahindra both overtook Hyundai in recent months.
What changed? Indian brands figured out the SUV formula. Tata's Nexon, Punch, Harrier, and Safari lineup covers every price point. Mahindra's Scorpio N, XUV700, and Thar became aspirational products. Both companies price aggressively and pack features that attract young buyers.
In our opinion, Hyundai's challenge isn't product quality. Their cars remain reliable and well-built. The issue is perception and value. Indian buyers now see homegrown brands as equally good but more affordable.
Hyundai needs to reconsider its pricing strategy. The premium they charge over Tata and Mahindra no longer feels justified to many customers.
What Models Drive Hyundai's SUV Success?
Three models carry Hyundai's SUV business:
Creta remains the undisputed king. This mid-size SUV dominates its segment with stylish looks, spacious interiors, and strong resale value. Families love its combination of comfort and features.
Venue targets budget-conscious SUV buyers. Its compact size works well in crowded cities while offering SUV styling and ground clearance. The recent update on November 4 brought fresh looks and new tech.
Exter entered as Hyundai's smallest and most affordable SUV. Launched to compete with Tata Punch, it gives first-time SUV buyers an entry point into the segment. Rural markets embraced Exter enthusiastically.
Young Buyers Trust Hyundai
The fact that 60 percent of buyers are under 40 years old reveals something important. Hyundai built strong brand equity over three decades in India. Young professionals and families trust the name for reliability and service network.
We've seen this trust translate into showroom visits. But converting visits into sales became harder with aggressive competition. Young buyers compare every feature and price point online before deciding.
Hyundai's challenge is keeping this young customer base loyal when alternatives offer similar features at lower prices.
Looking Ahead: Can Hyundai Bounce Back?
The Indian car market keeps growing. SUVs will continue dominating buyer preferences. Hyundai has the products, manufacturing strength, and dealer network to compete.
But they must adapt. Pricing needs recalibration. Feature packages should offer better value. Marketing must highlight what makes Hyundai special beyond just being a Korean brand.
The upcoming months will test Hyundai's strategy. Will they fight back with aggressive pricing? Can new model launches recover lost ground? Or will Tata and Mahindra solidify their positions above Hyundai?
One thing seems certain: the battle for India's car buyers just got more intense. Customers benefit from this competition through better products, more features, and competitive prices.
Also Read: Maruti Suzuki Hits Record Export Numbers: What This Means for Car Buyers
Key Takeaways
Hyundai's Q2 FY26 results paint a mixed picture. SUVs dominate their sales at 71 percent, showing they understood market trends. Export business thrives with 21.5 percent growth. Profitability stays healthy through disciplined pricing.
But losing the second place position stings. Tata and Mahindra proved that Indian brands can match or beat foreign competitors. Hyundai must evolve its strategy to reclaim lost ground.
For car buyers, this competition means better choices. Whether you prefer Hyundai's established reliability or the value proposition of Indian brands, the market offers excellent SUV options across price points.
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