This manuscript presents an advanced sensorless control strategy for Permanent Magnet Synchronous Motors (PMSMs) designed to address the challenges posed by cross-saturation effects and magnetic field distortions. The research focuses on fractional slot concentrated winding interior PMSMs, which are particularly prone to inductance parameter variations due to magnetic saturation and cross-coupling. To tackle these issues, a comprehensive analysis of the inductance parameter impact on position estimation error is conducted. Using finite element analysis (FEA), we carefully simulate the motor’s inductance, considering magnetic saturation and cross-coupling effects. These results are used in a sliding mode observer (SMO) for sensorless control, which is tuned with a phase-locked loop (PLL) to improve position estimation accuracy throughout the motor’s operating range. The low-speed startup is efficiently managed through an I/F initiation method, transitioning to the improved SMO and PLL for medium to high-speed operations, thereby achieving precise sensorless control. Extensive simulations substantiate the method’s feasibility and robust performance.