Best Car Stocks In India For Long Term

Car stocks in India comprise listed automobile companies engaged in the business of manufacturing, marketing, and selling four-wheelers in India. Best car stocks to buy include car manufacturers like Maruti Suzuki India, Hyundai Motors, Mahindra & Mahindra Limited, Force Motors, and Tata Motors. 

Investments in the above-mentioned car stocks can offer suitable investment opportunities as these equity shares provide access to the growing auto sector, high ROI potential, and capital appreciation avenues in the long term. 

To gauge the potential of the 4-wheeler stocks in India, you can also look at the historical returns of the Nifty Auto index. In the past 5 years, the index has given 30.47% price returns and 15.66% price returns since its inception, along with a dividend yield of 0.91 as on 30th April 2025.

The above statistics reflect the capability of the auto sector to provide long-term returns and value creation through investments in the best car stocks. However, the best car company stocks to buy are equity securities, which do not offer guaranteed returns. They experience market volatility and are affected by various other risks. Hence, to make safe and smart investments in the auto industry and know more about the best car stocks in India, keep reading the blog below.

Car Stocks to Buy In India – Industry Overview And Growth Prospects

The Indian automobile industry has always been a key driver of the economy. Rising middle-class income, technological advancement and increasing demand from the rural market have further intensified the growth of the auto sector. 

As per the report of IBEF, in 2021, India’s car market was valued at US$32.70 billion and is expected to reach the mark of US$54.84 billion by 2027. The passenger car market is expected to register a CAGR of over 9% between 2022 and 2027. Additionally, India is expected to become the largest EV market by 2030, providing space for the exceptional growth of EV stocks in India.

The auto industry has also experienced extensive interest from international investors. Between April 2000 and September 2024, the industry received a total FDI inflow of $36.21 billion. 

Best Car Stocks List In India As Per Market Capitalisation

Best Car Stocks In India – April 2025 Sales Data 

In April 2025, the passenger vehicle sales in India were led by Maruti Suzuki Limited, with a sale of 1,38,704 units. However, this reflects only a minimal increase of 0.5% compared to the sales of April 2024. 

Mahindra & Mahindra registered an increase of 27.60% in sales for April 2025, with 52,330 units compared to 41,008 units in April 2024. However, Hyundai Motors and Tata Motors experienced a decline of 11.60% and 5.60%, respectively, in April 2025 sales compared with the figure for April 2024.

Best Car Stocks In India – A Brief Introduction

Maruti Suzuki India Limited 

Maruti Suzuki India Limited is India’s largest car manufacturer and exporter of passenger vehicles. It is a publicly listed company that manufactures low-cost passenger vehicles for its consumers. In 1983, Maruti Suzuki rolled out its first unit of the Maruti 800, and since then, the company has sold 30 million cars by 2024.

Maruti Suzuki India sells its cars through 3 channels: Arena, Nexa, and True Value. As of FY24, the company has 2,987 units of Arena showrooms across 2,522 cities, where it has 495 outlets of Nexa in 301 cities. The car manufacturer sells second-hand cars through 577 True Value outlets in 287 cities of India. 

Mahindra & Mahindra Limited 

Mahindra & Mahindra, or M&M Limited, is a subsidiary company of the Mahindra Group. M&M has been engaged in the mobility business while manufacturing passenger and farm vehicles since 1947.

As of 31st March 2024, the M&M had 47 manufacturing plants with a total annual sales of 8,24,939 units, registering 18% YoY growth. The company also dominates the SUV segment, with the highest revenue market share of 20.4%. 

Tata Motors Limited

Tata Motors Limited (TML) is a leading car manufacturer and India’s largest commercial vehicle manufacturer. Along with the ICE car, Tata Motors also holds the first place in India’s EV vehicle sales.

As per the annual report for FY 2024, the company clocked annual PV and EV sales of 5,73,541 units, registering a growth of 6% compared to the sales of FY 23. Under the electric vehicle segment, Tata Motors achieved a market share of 70% with sales of 73,844 EVs in FY24, registering a growth of 47.5% vs FY23. 

Hyundai Motors Limited 

Hyundai Motors India Limited (HMIL) is a subsidiary of Hyundai Motor Company (HMC). The 4-wheeler lineup of HMIl includes models like i20, Verna, Creta, i10, Venue, Aura, Creta Electric, Alcazar, Tucson, and other variants. In FY24, Hyundai Motors Limited launched 5 new car models, including Exter and 2 limited edition models of Create & Alcazar.

It also acquired a manufacturing plant in Talegaon, Maharashtra, to expand its manufacturing capability. During the period in consideration, the company earned revenue from the operations of ₹6,85,386.09 million and profit before tax (PBT) of 80,954.84 million. Hyundai Motors’ profit for the year was ₹59,543.06 million, higher than the previous year’s profit of ₹46,538.47 million. 

Force Motors Limited

Force Motors was established in 1958 by Shri. N. K. Firodia. It is a fully vertically integrated automobile manufacturer that offers a range of Small Commercial Vehicles, Multi-Utility Vehicles, Light Commercial Vehicles, and Special Vehicles. 

Primarily, Force Motors does not deal in family passenger vehicles like its competitors mentioned above. However, under its special vehicle range, it manufactures 4-wheelers under the brand name of the Gorkha series. It offers the Gurkha with 3-door and 5-door variants and a price range of approximately 16.75 lakhs to 18 lakhs. 

Read More – Auto Sector Stocks In India for 2025 

Benefits of Investing in Car Stocks in India

The best car stocks in India offer their shareholders a wide range of benefits. These include exposure to international markets, innovation & tech advancements, and long-term capital appreciation. Passenger vehicle stocks can be a beneficial investment because of these benefits, along with others mentioned below. 

Technological Advancement 

In recent years, the automobile industry has undergone constant changes, including the introduction and growth of electric vehicles. For example, the advent of EV vehicles has created a new space for car stocks and underlying companies to grow.  Thus, innovation and tech advancement lead to high earnings and widened market share, increasing the value of car stocks in India. In return, it enhances your portfolio performance and returns on investments. 

Global Demand

Car manufacturers like Maruti Suzuki and Hyundai Motors India attract huge demand from both domestic and international consumers. Hence, investors can generate exponential returns from the global car demand by investing in the best car company shares. 

Dividend Yield

The rising demand for passenger cars, combined with the constant technological development, increases the income and profit reserves of car companies. Hence, investing in car stocks with sufficient reserves offers a good dividend yield, creating an additional income source for investors. 

Portfolio Stability

Automobile industry investment in well-established car company stocks can provide stability to investor’s portfolios and safeguard them from unexpected market downturns. 

Best Car Stocks in India With Dividend Yield 

“Track the performance of the Indian Auto Sector. Track real-time Nifty Auto returns”

Factors Affecting Car Company Shares In India

Tech Advancement and Innovation

Latest developments in the car industry significantly affect the growth and revenue of car manufacturing companies. Thus, to ensure a high and stable ROI, you must invest in the best car stocks representing tech-enabled and innovation-savvy companies. 

Economic Cycles 

Economic cycles, including expansion or recession, affect the whole economy. In case of recession, every stock, including the best car stocks to buy, experiences a negative momentum due to decreased 4-wheeler demand. Meanwhile, in the expansion phase, there is positive momentum in the overall market, which positively impacts car stocks in India. 

Government Policies

Government policies such as the ‘Make In India’ initiative, FAME, and PLI scheme incentivise auto companies to increase their manufacturing and marketing capacities. Because of these policies, the best car stocks in India experience trend reversals. Hence, tracking these factors can assist you in identifying long-term car stock picks for investments at suitable prices. 

Raw material cost 

The automotive industry is highly reliant on using raw materials for production activities. Hence, the changes in raw material cost and supply bring a simultaneous change in prices and supply of cars. This impacts the car stocks in India significantly, leading to notable price volatility. 

Company Performance 

Investors must track the company’s earnings, debt level, capital employed, balance sheet, and other indicators to assess the financial health of a car manufacturing company. It can help them analyse a car stock in India investment based on the underlying company’s financial performance. 

Best Car Stocks To Buy – Risks To Consider Before Investing

Supply Chain Issues

The Indian automotive supply chain is very complex and essential for the smooth functioning of the auto industry. From raw material sourcing to the final production facilities, every step adds to the cost of a car. Hence, supply chain disruption can impact the financial performance of companies and the price of car stocks in India.

Regulatory Framework

The Indian government has enacted many green initiatives and regulatory frameworks to achieve a cleaner economy and reduce carbon emissions. Policies such as reduced running life for ICE cars in some regions of India can impact car sales. It leads to a change in the prices of the best car stocks to buy and can turn your investments into loss-making avenues. 

Competition 

The increasing number of  4-wheeler manufacturers in India and easy access to capital have increased the industry competition in recent years. Therefore, companies face a shrinkage in profit margins and growth prospects with increased costs, directly affecting the future potential of the best car stocks in India. 

Seasonal Factors

Car sales in India vary according to the seasonal demand of customers.  For example, car sales increase during the new year and festive season, whereas a slump occurs in sales figures during the off-season. Hence, the best car stocks experience high volatility due to the seasonal nature of the 4-wheeler business. 

How To Choose the Best Car Stocks In India? 

Financial Analysis 

You must look for ratios such as P/E, ROE, D/E, and profitability levels while analysing company financials. It can provide you with valuable insights about the manufacturer’s profitability, capital structure, ROI, and future potential. Once you are thoroughly familiar with these aspects, it becomes easier to identify and buy the best car stocks in India. 

Industry Analysis

Conducting industry analysis can provide a broader view of the competitive landscape, market structure, and growth opportunities in the best car stocks. Hence, you must analyse the automotive industry to better understand a 4-wheeler manufacturer’s future performance before choosing the car stocks to buy.

Risk Profile Evaluation

Analysing your risk profile can help you decide how conservatively or speculatively you should allocate capital to a car company share. Assessment of risk tolerance level can narrow down your research and assist you in choosing the best car stock in India. 

Peer Comparison

Peer comparison is a widely accepted method that can help you filter out overvalued car stocks and choose the best passenger vehicle for your portfolio. 

“Ready to invest in the car stocks in India? Invest now using Univest demat and stock recommendation.”

Conclusion 

While concluding the above blog, we can infer that the best car stock can provide extensive future growth and multi-bagger returns. Therefore, many investors prefer to invest in car company shares to create a robust stock portfolio and earn dividends. However, given the unpredictability of the stock market, even the best car stocks to buy are not detached from market risks and can experience negative performance in the future. 

Hence, investors must thoroughly research and analyse the auto industry, the underlying 4-wheeler company, and other related aspects before investing in a long-term car stock in India. Also, investors can consult financial experts and advisors to wisely and safely allocate their capital in the best car stocks. 

Frequently Asked Questions on Best Car Stocks to Buy 

Which car stock is best?

The best car stock list in India as per return on equity (ROE): 

How can I buy car stocks in India? 

You can buy car stocks in India using your demat account. If you don’t have a demat account, you can open a new account with Univest and invest in car company shares using the steps below: 

Step 1 – Download the Univest app from the Apple and Google Play Store. 

Step 2 – Start your demat application process on the app. 

Step 3 – Once the process is complete, your demat account will be active. 

Step 4 – Identify and choose the best car stocks to invest in. 

Step 5 – Place the buy order for the chosen stock with the desired quantity. 

What are auto stocks? 

Auto stocks are equities of listed companies engaged in producing, marketing or selling automobiles and ancillary products to various consumers. 

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