The voice about India’s car market staring at stagnancy is growing amid much selling by foreign investors in the stock market. Auto sticks of OEMs and suppliers have taken a beating lately. The reasons for stock market decline are said to be structural issues as well as geopolitical issues. In other words, they are local as well as global in their nature. The Indian auto industry – as the largest contributor of GST to the exchequer and among the highest contributor to the country's manufacturing GPD – is also quite local and global in its ways of working. 

Like any other developing nation, it is a market where the scope for an increase in automobile population is bright. It is also a market that is beset by structural issues nonetheless. With 34 cars owned per 1,000 people, the country with a population estimated to be 1,463,865,525 in 2025 has ample scope for auto sales growth. 

But as banks struggle for liquidity and a reduction in repo rate by the apex bank fails to reflect in the reduction of loan interest rates or equated monthly instalments, the structural issues facing the automobile industry are too stark to overlook.

Adding to the structural issues are perhaps developments such as the recent announecement by Maharashtra Government to levy six percent motor vehicle tax on premium electric vehicles. The leading industrialised state also has among the highest road toll taxes among other Indian states. The highway network in the state is among the most lacking and unsafe. Most roads in the state have either deteriorated or are under a seemingly unending period of repairs. 

The state government in its 2025 budget has also announced that it has raised the motor vehicle tax by one percentage point on individual-owned non-transport four-wheeler CNG and LPG vehicles. Such vehicles currently attract a seven to nine percent tax depending on their type and price.

While electricity costs have been rising with distribution companies like MSEDCL pushing for a revision in fixed and energy charges for various categories in order to bridge revenue gap, owning electric vehicles and CNG vehicles is becoming costlier though eco-friendlier.

Attracting over 200 percent in taxes, petrol and diesel prices have been at an all-time high. A timely upward revision in toll prices is only adding further to the cost of motoring in a country where close to or more than 50 of the vehicle purchase price amounts to taxes. Spares are also taxed at a hefty 28 percent and the labour costs have steeply risen post Covid-19 pandemic.

With vehicle prices being jacked up by automakers under the pretext of rising input costs by about four to five percent if not more, the Indian auto industry is clearly under pressure to maintain its margins and stay profitable.

Against the operating costs, the foot falls in the showroom are taking longer to realise into actual sales. Discounts are gaining speed and indicative of sales losing stream in some of the segments that were until recently doing very well.

Any excitement about a rebate in Income Tax up to INR 1,200,000 – it takes over INR 1,000,000 to purchase a decent car in India today – seeming to have faded into thin air, the talk about government announced a reduction in GST taxes has gained speed. When it would actually come into effect is yet to be known but the narrative has started building. The stock market does not look excited however and the money lost by domestic investors may take a long time to come back, it seems.

As US President Donald Trump speaks about exposing India’s ‘wrong’ tariff policies in the absence of any statement from the Indian government striking out his claims, the Indian market for automobiles and other consumer goods looks destined for a rough ride. Stagnancy will be a part of the plot, the repercussions of which would stem from domestic structural issues as well as geopolitical shifts where calls like ‘China Plus One’ hold no value at all anymore.

With the entry of Tesla – which has seen its sales and stock prices plummet in many of existing markets off late – set to enter India with the government lowering tariff under pressure from the US President, the subject of too much regulation needs to be examined in terms of structural strength and the industry’s ability to be competitive. Local manufacture is also a subject that needs to be looked at as MSME sector continues to shrink and take down with it the PMI index.

Skilling is also a subject that should be looked at as engineering courses lose interest with the young in the country. A manufacturing-less economy that is also witnessing the services sector face a slowdown – again due to structural and geopolitical issues – may not spell a good omen for growth in the long run. This, particularly in the case of a country whose median age in 29 years.

China’s ‘Deep seek’ has shown how the prowess in technology can shift overnight and highly influence the economy of a nation, its stock markets suddenly. In India, the auto industry should nurture the MSME sector as much as the government should. A services alternative in terms of growth over manufacturing may not hold forth in the long-term. Manufacturing exports can shrink abruptly anytime under the shifting regulatory and other market issues in the domestic marketplace and under the shifting geopolitical situations in various parts of the world that also make lucrative export markets.  

Image for representative purpose only. 

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BMW Group India has surged to the top of the luxury car retail charts in the first half of CY2026, overtaking its closest rival in a significant milestone for the company. The company sold a total of 9,075 vehicles  between January and June 2026, a 17 percent YoY increase.

In an interaction with Motoring Trends, Hardeep Brar, President & CEO, BMW Group India, attributed this success to a potent combination of new product launches and shifting consumer preferences towards electric vehicles amid global fuel price volatility.

“A couple of factors played very well for us. So firstly, we launched 11 new models and second thing, because of the West Asia crisis, an increase in fuel prices, a lot of narrative got shifted towards EVs; a lot of people are preferring to buy EVs versus diesel now,” said Brar.

The company’s aggressive product offensive has been central to its performance. With 11 models already launched in the H1 against the planned 25 product offensive for the year, BMW is capitalising on both traditional and emerging powertrains. Brar expressed strong confidence for the remainder of the year, noting an even more exciting pipeline ahead.

“So that gives us more confidence and EV story is only getting stronger with every passing day. I think we have reached an inflection point; people are really loving the EVs that we are introducing,” he remarked.

BMW’s EV penetration stands at an impressive 26 percent within the luxury segment, significantly ahead of the luxury average of around 14 percent and the broader industry’s 6 percent.

Brar highlighted that removing ‘BMW from the luxury equation drops the segment’s EV share to 8-9 percent, underscoring the brand’s leadership in electrification.’

Responding to the key factors driving EV adoption in the luxury space include near price parity between petrol and electric variants, ranges exceeding 500 km (with next-generation models targeting 800 km), and innovative customer assurances.

“EV customers have a lot of anxiety in terms of residual resale value. So, we have a program where we give an assured buyback to the customer that after three years you will get 60 percent of the value. And that is really playing and that is giving them confidence,” Brar explained.

MINI’s Remarkable Revival

On the other hand, the MINI brand has also delivered exceptional results. After selling approximately 730 units last year, BMW India launched the locally produced Countryman C last month at INR 4.75 million, passing on cost benefits to customers. The response was overwhelming, with 150 units sold in the first month alone.

“We are growing at almost 70 percent for MINI in H1 CY2026 and we want to double the volumes of 730 units last year and are looking at 1,500 units for MINI in CY2026,” Brar stated.

Localisation, Dealer Dynamics and Manufacturing Focus

On localisation, the company maintains an average of 50 percent, slightly higher for internal combustion engine (ICE) models than EVs, with ongoing efforts to deepen content in battery technology as more local players emerge.

Addressing dealer profitability concerns around EVs, which typically require less aftersales maintenance, Brar noted strong upfront margins due to high demand. “Dealer doesn’t lose any money on selling the new car. Whereas petrol and diesel have an oversupply and thus they are able to make far more money on the electric vehicle.”

He confirmed that discounting remains absent on EVs, with waiting periods stretching to three months owing to robust demand.

India’s rising importance in BMW’s global portfolio was a recurring theme. “India is one of the fastest-growing markets for BMW across the globe. This year, India is at No. 1 in terms of growth globally,” Brar said.

The company has moved into the global top 20 markets, prompting increased focus from headquarters.

Going forward, BMW Group India plans to produce 20,000 cars this year, up from 18,000 units last year, with ongoing investments in production lines and AI for efficiency. A significant INR 4 billion investment is earmarked for the retail network across CY2025–2027.

The second half of 2026, will see BMW Group India introduce 14 additional launches, including electric vehicles, sedans and SUVs, maintaining strong momentum.

Sharing his views on the sedan segment, Brar said that it continues to hold a robust 35 percent share of BMW’s sales, far above the industry’s 9-10 percent, reflecting enduring customer preference for the brand’s driving dynamics.

When asked about key challenges and opportunities, Brar outlined a balanced view.  “In terms of headwinds, forex is an issue because it is deteriorating. And with every one rupee deterioration, it impacts our bottom line by 1 percent.” He also flagged the risk of sudden shifts away from diesel potentially creating inventory challenges.

On the flip side, “The accelerating EV transition, rapidly growing demand from Tier-2 and Tier-3 cities, and continuous improvement in brand and customer experience becoming better with every passing day. So that I see as another very, very strong tailwind for us,” concluded Brar.

Despite broader manufacturing sector concerns around labour shortages, BMW reports no significant issues, thanks to proactive AI and automation initiatives.

Data source: Vahan

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German luxury brand BMW Group India has reported its highest-ever sales for the first half (H1) of 2026, delivering 9,075 vehicles between January and June, a 17 percent YoY increase.

In Q2 CY2026, the company delivered 4,507 cars, representing 17 percent growth compared to the same period in 2025.

The group maintained a strong position in the luxury electric vehicle (EV) segment, delivering 2,359 EVs during the first half, marking a 78 percent increase, with these EVs now accounting for 26 percent of its total sales.

The company also saw significant demand for long-wheelbase models, which recorded a 24 percent increase and made up 52 percent of total sales. Sports Activity Vehicles (SAVs) contributed 65 percent to total volumes, growing by 35 percent.

On the other hand, MINI recorded 504 deliveries, a 70 percent increase, while BMW Motorrad delivered 2,327 motorcycles during the same period.

Hardeep Singh Brar, President and CEO, BMW Group India, said, “BMW Group India has delivered its highest-ever sales performance in the first half of 2026. We have delivered 9,075 cars, but beyond this impressive number, what we are really focused on is to continue our steady double-digit growth in an otherwise challenging environment. The +17 percent growth is a clear reflection of the deep trust our customers place in our brands. Our decisive hold on electric mobility has solidified BMW Group India as the number one choice in luxury EV segment. With a phenomenal 78 percent growth, every fourth car we sell today is an EV. Furthermore, our customer-centric product strategy continues to pay off, driven by a substantial surge in demand for our executive long wheelbase models and dynamic sports activity vehicles. Building on the thrill of our new launches, we have planned 14 more exciting products across all three brands before year end. We will drive this performance to the next level with a luxury experience that is unparalleled in the segment and matches evolving customer desires. With the commitment of our dedicated team and dealer partners, we are confident of driving the momentum and rewriting success stories for the rest of the year.”

In H1 CY2026, BMW Group India has already launched 11 products and plans 14 additional launches by the end of the year. The company’s retail network currently stands at 100 touchpoints across 40 cities, with plans to open 19 more outlets in 18 cities throughout 2026.

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Vimag Labs has secured its fifth patent in India, marking a significant milestone for the company’s intellectual property holdings. The newly granted patent, titled ‘A Robust Rotating Transformer Excited Synchronous Motor and Its Control’, protects the fundamental design of the firm’s proprietary Virtual Magnet Synchronous Motor (VMSM) platform. This latest development strengthens a portfolio that now includes 5 granted patents, 10 pending applications and 15 filed trademarks across multiple technological domains.

The patented VMSM technology departs from conventional permanent magnet synchronous motors by eliminating fixed rare-earth magnets from the rotor. Instead, it employs power electronics and advanced control algorithms to generate and regulate its magnetic field in real time. This brushless, slip-ring-free design delivers performance comparable to, or better than, traditional magnet-based solutions while removing the dependency on physical magnetic materials.

With active pilot projects already underway alongside established two-wheeler and passenger car manufacturers, Vimag Labs is positioning itself for broader commercial adoption. Expansion strategies target light commercial vehicles, heavy commercial trucks and high-power industrial systems ranging from 200 kilowatts to 600 kilowatts, with additional research directed towards robotics, defence applications and cooling systems. The patented architecture provides original equipment manufacturers with reduced motor costs and insulation from supply chain vulnerabilities associated with rare-earth magnets, predominantly sourced from China.

Recent financial backing includes a USD 5 million Series A round led by Accel, with participation from Chakra Growth Fund and Thinkuvate. A manufacturing memorandum of understanding has also been signed with Jendamark Private Limited to facilitate production scaling. For India, the homegrown motor technology aligns directly with the Make in India and Atmanirbhar Bharat initiatives, promoting indigenous development of critical electric propulsion systems.

Manish Seth, Co-Founder and CEO, Vimag Labs, said, “This patent is the outcome of over 87,600 engineering hours. It strengthens every dimension of our commercial roadmap- OEM partnerships, licensing, manufacturing scale-up and future growth. Our long-term vision is to build scalable, software-driven, magnet-free motor systems for global electrification. This innovation strengthens India’s deep-tech base across electric mobility, power electronics, robotics, defence and clean-energy systems.”

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Primus Partners, a management consultancy organisation, has announced the launch of a Global Capability Hub in Gurugram, transitioning from its previous advisory role to provide end-to-end Build & Operate services. The platform assists companies with strategy, location selection, operations and talent acquisition.

As the first milestone for this platform, Primus Partners has established a technology-focused GCC for German automotive supplier Linde-Wiemann. The centre, based in Gurugram, will support global operations across ERP, technology, finance and supply chain functions, with plans to expand into engineering and design.

The company states that Gurugram is increasingly attracting multinational enterprises for Global Capability Centre (GCC) investments, supported by the Haryana Global Capability Centres Policy 2026.

The region is emerging as a competitor to traditional hubs like Bengaluru, Hyderabad and Pune due to its access to talent, infrastructure and proximity to the National Capital Region.

Nilaya Varma, Global CEO, Primus Partners, said, "India's GCC story is entering an exciting new phase. While traditional destinations will continue to grow, the next wave of investments will increasingly be driven by locations that combine exceptional talent, strong industry ecosystems, world-class infrastructure and progressive policy support. Haryana, and Gurugram in particular, has all the ingredients to become one of India's leading GCC destinations. Over the years, we have partnered with multinational enterprises on their GCC strategy and advisory requirements. Today, we are taking the next step by helping them build, operate and scale these centres from India. Our engagement with Linde-Wiemann is an important milestone in that journey and reflects the growing confidence global enterprises have in Haryana as a strategic destination for future-ready Global Capability Centres."

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