Tata vs Mahindra: New launches set stage for No.2 carmaker fight

Tata Motors Passenger Vehicles is set to kick off this push on Tuesday with the facelifted Tata Punch, one of nearly half a dozen new and refreshed models planned by the two homegrown rivals as they battle for the No.2 spot in India’s passenger vehicle market, well behind market leader Maruti Suzuki India Ltd, which continues to dominate the segment by a wide margin.

The launch follows closely on the heels of Mahindra unveiling upgraded versions of its flagship SUVs—the XUV700 and XUV 3XO—at an event in Jaisalmer, Rajasthan.

The product plans come as automakers brace for the third phase of Corporate Average Fuel Efficiency (CAFE) norms, proposed to be implemented from April 2027. These norms tighten fleet-level emission targets and are expected to push higher penetration of clean-fuel vehicles.

Closing the gap

The aggressive product push follows Mahindra ending 2025 as India’s second-largest carmaker with retail sales of 592,771 units, narrowly ahead of Tata Motors at 567,607 units, according to data from the Federation of Automobile Dealers Associations (FADA).

Both Indian manufacturers overtook Hyundai Motor India Ltd, which has long held the No.2 position in the domestic passenger vehicle market.

Mahindra confirmed to Mint that it plans one to two refreshes across both its electric vehicle (EV) and internal combustion engine (ICE) portfolios in 2026, following the two upgraded SUV launches in early January.

Tata Motors, meanwhile, is preparing to introduce at least three products in the Indian market, with a strong focus on electric vehicles.

Platform push

Responding to Mint’s queries, Nalinikanth Gollagunta, chief executive officer of Mahindra’s automotive division, said the company would prioritise updates to its existing portfolio before rolling out new models on its latest NU_IQ vehicle platform.

“Besides these (two major launches in January), we plan to have one to two refreshes in both EV and ICE in due course of 2026," Gollagunta said.

“In addition to planned updates across our existing portfolio, our next major milestone will be the first production vehicles from the new NU_IQ architecture—a modular, multi-energy platform previewed in August 2025, with initial launches expected in calendar 2027."

Mahindra launched the refreshed seven-seater XUV700—renamed XUV 7XO—and introduced an electric powertrain in its compact SUV XUV 3XO in the first week of January.

Tata’s EV bet

Mahindra’s admission of multiple upcoming launches comes weeks after Tata Motors outlined its own plans for 2026.

According to the company’s presentation at a media conference in December, Tata will launch an electric version of the recently unveiled ICE-powered Sierra SUV and roll out an upgraded Tata Punch EV in 2026.

Tata Motors also plans to introduce its premium electric brand Avinya by the end of the current calendar year. In addition, the company is set to launch a facelift of the sub-compact Tata Punch SUV on 13 January to refresh its portfolio, as the passenger vehicle market received a boost following cuts to the goods and services tax (GST) in September.

Tata’s strategy hinges on doubling down on electric vehicles, a segment where it sold more than 70,000 units in calendar year 2025, marking 13% growth.

“With these actions, we believe a steady EV market share of 45–50% is achievable even in a more competitive environment," said Shailesh Chandra, managing director and chief executive of Tata Motors Passenger Vehicles, citing the company’s broad portfolio and charging ecosystem investments.

Analyst view

Analysts say both automakers are well positioned to navigate tighter emission norms while protecting margins between FY2027 and FY2032.

“Among OEMs, Tata Motors is best positioned, with a 15% battery electric vehicle mix and strong platform depth, followed by Mahindra & Mahindra, which benefits from early BEV traction and scalable born-electric architectures," wrote Rishi Vora and Apurva Desai of Kotak Institutional Equities in a 9 January note.

Motilal Oswal Financial Services Ltd said Mahindra’s aggressive launch pipeline should support sustained growth.

“Beyond these models (launched in January), the company plans to launch two more ICE variants in FY27, alongside an EV in the same fiscal year. This healthy launch pipeline is expected to help sustain healthy demand momentum going forward. We expect MM to deliver a 14% volume CAGR over FY25–28E," the brokerage said in an 8 January note.

Since the start of 2026, Tata Motors PV share price has declined by 3.94% while Mahindra’s share price has fallen by 2.89%. In the same period, Nifty Auto’s share price has fallen by 1.69%.