India’s automobile industry has witnessed a dip is sales number in the passenger and commercial vehicle segments in FY24 and H1FY25. However, experts from CareEdge Ratings opine that this dip is no alarming for the overall industry as it is a cyclical downturn and the industry will bounce back. 
Commenting on the same during a virtual press conference, Senior Director Ranjan Sharma said, “The automobile sector has exhibited a mixed trend in H1FY25. While the two-wheeler industry has zoomed ahead at a healthy year-over-year growth rate of 16 percent, primarily driven by strong rural demand on the back of higher rural income levels, the passenger vehicle (PV) industry after witnessing healthy growth in past 2-3 years, has entered the slow lane during H1FY25 with wholesale volume growth slowing down to 2 percent on year-over-year basis due to subdued demand for entry-level cars and elevated inventory levels at dealer’s end. While two-wheeler volume growth is expected to remain healthy during FY25, overall PV volume growth is expected to continue to remain muted in FY25.”
“The commercial vehicle (CV) sector experienced significant growth post-pandemic, with approximately 30 percent growth in FY22 and FY23. FY22's growth was driven by a low base effect due to the pandemic's impact in FY21, while FY23 saw robust growth on a higher base. However, the momentum appears to have plateaued. Last year, the sector recorded a slight decline of around 1 percent and the current half-year shows a further decline of approximately 3 percent, primarily driven by a drop in the light commercial vehicle (LCV) segment. Meanwhile, the medium and heavy commercial vehicle (MHCV) segment has remained relatively stable,” he added. 
He also noted that infrastructure spending and increased construction activity in the second half of the fiscal year, supported by heightened government investment, could lead to some improvement. Nevertheless, for FY25 as a whole, CV volumes are expected to remain in negative territory, with an estimated decline upto 3 percent.
Commenting on how the dip in sales will fare for the overall automobile industry, he stated, “The two-wheeler segment is performing well overall. However, major CV and PV players are doing well individually, though volume growth is expected to remain neutral for a year or two, as this is cyclical. The sectors witnessed such fluctuations every 2-3 years but there is no alarming concern for the overall sector. Moreover, there are no significant concerns from a credit quality standpoint. These companies are large, have diversified portfolios and maintain a strong financial risk profile.”
He added, “The PV sector witnessed significant growth in the past couple of years, driven by its cyclical nature. The growth rate for FY25 is projected to be around 3 percent with a similar trajectory expected for FY26. The LCV segment, being more price-sensitive, has been particularly affected, showing sharper declines. For FY25, the sector is expected to close with a decline of about -1.5 percent to -2 percent. Looking ahead to FY26, even under the best-case scenario, growth is likely to remain subdued, with only minimal improvements expected, driven by the same underlying factors.”
Alluding to the performance of the electric vehicle (EV) segment, he said, “EV volumes have shown healthy growth, particularly in two-wheelers and e-buses. However, this growth has come from a very low base. Even in FY24, EV penetration remains modest with two-wheelers at approximately 5.4 percent and other segments, including passenger and commercial vehicles, at around 2 percent each. The slower pace of growth and penetration can be attributed to challenges such as underdeveloped EV charging infrastructure and the high cost of EVs compared to internal combustion engine (ICE) vehicles, which continue to act as significant bottlenecks.”
 

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The Federation of Automobile Dealers Associations (FADA), the apex body representing automobile dealers in the country, recently released retail sales data for the 2025 calendar year, reporting total registrations of 2,81,61,228 units, which was 7.71 percent higher over the 2,61,45,206 units recorded in 2024.

The apex body stated that 2025 was characterised by two distinct periods, with sales remaining muted from January to August before an upturn from September to December following the implementation of GST 2.0.

In the Passenger Vehicle (PV) segment, annual retail sales reached 44,75,309 units, a growth of 9.70 percent. Data indicated that rural markets outperformed urban areas, with rural PV sales rising by 12.31 percent compared to 8.08 percent in cities.

Two-wheeler (2W) segment saw registrations of 2,02,95,650 units, up 7.24 percent, while the Three-Wheeler (3W) and Commercial Vehicle (CV) sectors grew by 7.21 percent and 6.71 percent respectively. The Tractor segment recorded the highest growth rate at 11.52 percent, totalling 9,96,633 units. Conversely, Construction Equipment (CE) was the only category to decline, falling 6.67 percent to 74,029 units.

For December 2025, total vehicle retail reached 27,10,698 units, a 12.27 percent increase over December 2024. Inventory levels for Passenger Vehicles stood at 30–35 days, while Two-Wheeler inventory was maintained at 20–25 days. FADA noted that the year-end performance was supported by aggressive original equipment manufacturer (OEM) schemes and improved consumer sentiment.

C S Vigneshwar, President, FADA, said, “CY’25 has been a year of resilience and ultimate recovery for the Indian Auto Retail. While the first eight months were overshadowed by high interest rates, inflationary pressures and election-related caution, the final four months - post the introduction of GST 2.0 - acted as a catalyst. The reduction in effective tax rates on vehicles not only made mobility more affordable but also reinvigorated a market that was showing signs of fatigue. Rural India has emerged as the clear driver of growth this year. The double-digit growth in Tractors and the fact that Rural PV sales outpaced Urban by a significant margin confirms that the Bharat story is strengthening. We are seeing a structural shift where personal mobility is becoming a necessity in the hinterlands, supported by better crop realisations and improved infrastructure.”

Looking ahead to January 2026, FADA maintains a cautious outlook due to the high base effect from the previous year and the conclusion of year-end discount cycles. The association expects the market to enter a period of stabilisation as dealers focus on liquidating remaining 2025 stock.

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Hyundai Motor India (HMIL), one of the leading passenger vehicle manufacturers, has announced that Tarun Garg has assumed the role of Managing Director and Chief Executive Officer, effective today.

With this, Garg becomes the first Indian national to lead the company since its inception 29 years ago. He comes with over 32 years of experience in the automotive industry and previously served as the Chief Operating Officer of Hyundai Motor India. His appointment comes as the company prepares for its next phase of growth in India.

HMIL has outlined an investment roadmap of INR 450 billion to be implemented by FY 2030. Under Garg’s leadership, the company will focus on four pillars:

• Future-Ready Strategy: Acceleration of electric vehicles, hybrids and connected mobility.
• People and Market Focus: Support for employees and the network of dealers and suppliers.
• Customer-Centric Approach: Building trust and experience across touchpoints.
• Production and Exports: Enhancing indigenisation at plants and positioning HMIL as a hub for exports to emerging markets.

“India’s automotive industry is at an exciting inflection point, driven by innovation, sustainability, and evolving customer aspirations. It is an extraordinary honour to lead Hyundai Motor India at this defining moment in our three-decade long journey. My vision is to build on our strong foundation while accelerating HMIL’s transformation towards sustainable growth, technological leadership, and unmatched customer delight. We will continue to reinforce our commitment to ‘Make in India’ and position HMIL as a global hub for exports. Aligned with Hyundai’s global vision of ‘Progress for Humanity,’ we will strengthen Hyundai’s legacy and create meaningful mobility solutions that not only empower people but also connect communities and enrich lives. The future is ours to build and I am committed to leading HMIL with agility, conviction and purpose,” said Garg.

During his time as Chief Operating Officer, HMIL reported record sales for three years and completed an IPO in 2024. Garg also launched the ‘Samarth by Hyundai’ initiative to improve accessibility for people with disabilities.

Before joining HMIL, Garg held positions at Maruti Suzuki India, including Executive Director of Marketing, Logistics, Parts and Accessories. He is a mechanical engineer from Delhi Technological University and holds an MBA from IIM Lucknow.

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Mahindra Group Chairman Anand Mahindra has struck an upbeat yet reflective note on the automotive industry’s outlook, signalling confidence in demand, technology-led disruption and India’s growing role in shaping the future of mobility. In a year-end address to employees, Mahindra underlined that the Group’s recent performance is less about short-term numbers and more about structural shifts underway in the business and the broader industry.

The Group’s automotive operations stood out in what Mahindra described as a year of ‘market leadership and redefined expectations’.

Mahindra & Mahindra’s SUV portfolio delivered a record market share, consolidating the company’s position in one of India’s most competitive and fast-evolving segments. The performance, he suggested, reflects a sharper understanding of consumer aspirations rather than cyclical tailwinds.

Beyond passenger vehicles, Mahindra’s farm equipment business recorded its highest-ever quarterly market share, while its electric three-wheeler business retained leadership in a crowded and price-sensitive market. Together, these segments underline the Group’s diversified exposure to rural demand, urban mobility and electrification – three pillars that continue to define India’s automotive growth story.

Mahindra framed these achievements as ‘launchpads’, arguing that the Indian automotive industry is entering a phase where execution and innovation matter more than legacy positioning. Once known primarily for rugged, utilitarian products, Mahindra is now increasingly associated with modern design, connected technologies and electric mobility.

“EVs did not just change our portfolio; they changed the conversation,” he said, signalling that electrification has become central to the Group’s identity rather than an adjunct strategy.

This shift mirrors broader trends across the Indian automotive sector, where OEMs are balancing near-term internal combustion engine demand with longer-term bets on electric platforms, software-defined vehicles and advanced manufacturing. Mahindra’s message suggests confidence that Indian players can compete not just on cost, but on technology and relevance.

A significant part of Mahindra’s outlook is shaped by the rapid advance of artificial intelligence and automation. While AI is often seen as a disruptive force for manufacturing jobs, Mahindra offered a contrarian view, particularly relevant for automotive production and supply chains. He argued that AI will act as an ‘accelerator, not a threat’, enhancing the value of hands-on skills on the shop floor.

According to Mahindra, technicians, machinists and operators who can work alongside intelligent systems will become premium assets. In an automotive context, this has implications for everything from smart factories and predictive maintenance to quality control and EV assembly.

“AI can turn blue collar into gold,” he remarked, highlighting a future where digitally enabled manufacturing skills command higher productivity, dignity and income.

The Group is backing this view with investments in skilling and education. Mahindra highlighted its involvement with vocational training initiatives and engineering talent development, positioning skills as a strategic enabler for the next phase of industrial growth. This emphasis also aligns with global shifts in talent mobility, as tighter visa regimes in the West potentially create opportunities for India to retain and attract high-quality engineering and technology talent.

For the automotive industry, this could translate into stronger domestic R&D capabilities, deeper supplier ecosystems and global mandates being executed from India. Mahindra argued that the country has an opportunity to move from being a global ‘back office’ to a global ‘think tank’, especially as Global Capability Centres expand their footprint.

Looking ahead, Mahindra acknowledged that the external environment remains uncertain, shaped by geopolitical volatility, technological disruption and evolving consumer behaviour. However, he positioned uncertainty as a test of resilience rather than a deterrent. With sharper capabilities in mobility, electrification and manufacturing skills, the Group believes it is well placed to chart new growth paths.

For India’s automotive industry, the message is clear: leadership in the next decade will belong to companies that combine product innovation with talent development and technological confidence.

As Mahindra put it, “the future belongs to those who build it” — a sentiment that resonates strongly as the sector navigates its most significant transformation in decades.

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Haryana-headquartered Neolite ZKW Lightings, an automotive lighting manufacturer, has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).

The IPO comprises a fresh issue of equity shares worth up to INR 4 billion and an offer for sale (OFS) of INR 2 billion by existing shareholders, including Rajesh Jain, Neokraft Global Private and ZKW Group.

The company intends to allocate the net proceeds from the fresh issue to expansion and financial goals. This includes a new greenfield facility at an estimated investment of INR 1.5 billion in Kancheepuram, Tamil Nadu. An estimated INR 790 million towards plant, machinery and electronic expansion at current sites. Furthermore, INR 650 million towards repayment or prepayment of borrowings.

Founded in 1992, Neolite ZKW holds a 34.43 percent market share in India's commercial vehicle lighting segment for FY2025. The company maintains a strategic alliance with the ZKW Group, a subsidiary of LG Electronics.

The company operates three manufacturing units in Bahadurgarh and Pune, serving over 40 OEMs including Tata Motors, Stellantis and Daimler. Its portfolio includes 830 SKUs, with a focus on LED and electric vehicle (EV) lighting solutions.

For FY2025, the company reported INR 5.12 billion in revenue, of which exports contributed 55.08 percent share. The net profit for FY2025 came at INR 528.24 million, as against INR 155.85 million in FY2023. The order book as of 31^st October 2025, stands at INR 1.71 billion.

At present, the company exports to over 50 countries, including regions in North America and Western Europe, positioning it as a significant Indian exporter of automotive components.

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