The recent tax relief in the union budget FY26 and the repo rate cut by the Reserve Bank of India (RBI) have sparked optimism in the automotive industry, particularly in the Rs 10 lakh to Rs 25 lakh car segment. According to a top official at Mahindra & Mahindra, these policy changes are expected to fuel demand for vehicles in this price range, potentially driving sales and market growth in the coming months.
RBI’s decision to reduce the repo rate by 25 basis points to 6.25% on February 7 has been met with enthusiasm by industry experts. Rajesh Jejurikar, the Executive Director of the auto & farm division at Mahindra & Mahindra, expressed confidence in the market potential for cars priced between Rs 10 to Rs 25 lakh, stating that the company’s strategic focus lies in the Rs 7-25 lakh category. This sentiment was echoed by Dr. Anish, the Group CEO of Mahindra & Mahindra, who emphasized that the tax relief measures would serve as a stimulus for demand among the middle class.
Dr. Anish further elaborated on the positive impact of these economic developments, stating, “We believe the fundamentals for the Indian economy are very strong, and we’ve seen some blips in the short run. The relief, in terms of taxation for the middle class, puts more money in their hands, creating a demand stimulus that will translate to greater capex from the private sector as well.” The rate cut by the RBI is also expected to contribute to a demand stimulus, further bolstering economic growth in the near future.
In light of these favorable conditions, Mahindra & Mahindra has reported impressive financial results, with a 19% year-on-year increase in profit to Rs 2,964 crore and a 20% surge in revenue from operations to Rs 30,538 crore in the October to December quarter of FY25. These gains were driven by robust demand for SUVs, allowing the company to maintain a strong foothold in the SUV market with a 23% market share.
Looking ahead, Mahindra & Mahindra is poised to capitalize on the growing popularity of electric vehicles (EVs) with the launch of its flagship born-electric models— the BE.6 and XEV.9e. Following their debut in December last year, the company is set to commence bookings for the EVs on February 14, with an initial rollout of 5,000 units of the BE.6 and XEV.9e.
As the automotive industry adapts to evolving consumer preferences and economic conditions, Mahindra & Mahindra’s innovative approach and strategic positioning within the market position them for sustained success and growth in the competitive landscape of the Rs 10-25 lakh car segment. With a focus on meeting the needs of the middle class and leveraging advancements in electric vehicle technology, the company remains at the forefront of industry trends and developments, driving forward momentum and innovation in the automotive sector.
