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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Astranova Mobility, an electric vehicle (EV) financing and asset management platform, has raised INR 600 million in a Series A equity funding round. The investment was led by IvyCap Ventures, with participation from existing investors Asian Development Bank and Advantedge Founders, as well as Silicon Valley-based Trucks Venture Capital.

Founded in 2023 by Kunal Mundra and Grip Invest, Astranova Mobility provides financing and operational services for commercial electric vehicles. The company’s portfolio includes two-wheelers, cars, buses and heavy-duty trucks. To date, the platform has enabled the deployment of over 25,000 EVs with an asset value exceeding INR 3.6 billion.

The company’s "full-stack" platform includes EV financing and leasing, asset selection and maintenance, proprietary data and technology dashboards, and operational support.

The capital will be used to enhance the company's data, AI, and engineering capabilities. Astranova aims to increase its scale fivefold over the next 18 months, with a long-term goal of enabling USD 1 billion in EV deployments over the next four years. The partnership with Trucks VC is intended to provide access to technical expertise from the United States automotive technology ecosystem.

Kunal Mundra, Founder and CEO, Astranova Mobility, said, “We are delighted to welcome IvyCap Ventures as a partner on this journey. Their deep experience and strong track record in the Indian startup ecosystem, combined with best-in-class access to institutional capital and engineering capabilities through institutions such as the IITs, will be a key differentiator for Astranova. With this fund raise, we have simultaneously unlocked significant debt capital and are now all set to grow over 5x in the next 18 months which will create a strong foundation for us to enable the deployment of USD 1 Bn EVs in the next 4 years and accelerate India’s transition to net zero.”

Vikram Gupta, Founder and Managing Partner, IvyCap Ventures, added, “Astranova Mobility is a strong enabler of India’s clean mobility transition, combining data-driven insights, financing strength, and deep sector expertise. Their rapid execution and clear vision for the commercial EV segment position them well to scale sustainable transportation nationally. We’re delighted to partner with them on this journey.”

Puneeth Meruva, Partner at Trucks Venture Capital, commented, “India’s transition to commercial electric vehicles will require over USD 100 billion in financing. Yet, traditional lenders lack the expertise to underwrite EV assets, while small fleet operators remain underserved due to limited credit access. Astranova addresses this gap through a data-first, full-stack platform spanning leasing, asset management, and maintenance.”

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German luxury brand BMW Group India has recorded its highest-ever Q1 sales, delivering 4,567 cars in the first three months of CY2026. This represents a 17 percent YoY increase, with every month in the quarter achieving record performance levels.

The Group maintains a 70 percent market share in the Indian luxury electric vehicle (EV) segment. In Q1, the company sold 1,185 BMW and MINI EVs, marking an 83 percent YoY growth. Currently, 1 in 4 vehicles sold by BMW in India is an electric model, with EV penetration reaching 26 percent of total sales.

The company’s electric portfolio includes 6 cars and 2 scooters, supported by a network of over 6,000 charging points nationwide. Initiatives such as Destination Charging and Smart E-Routing have been implemented to support the transition to luxury electric mobility.

As per the luxury brand, it observed growth across several specific vehicle categories:

• Long Wheelbase (LWB) Range: LWB models accounted for over 50 percent of total sales, with 2,256 units delivered, which marks 23 percent YoY increase.
• Sports Activity Vehicles (SAV) segment grew by 38 percent YoY, totalling 2,966 units and representing 65 percent of the group's car sales.
• MINI: The brand delivered 213 units, achieving 42 percent growth.
• BMW Motorrad: The motorcycle division delivered 1,216 units, led by demand for the G 310, S 1000 and GS series.

BMW Group India has planned 27 product launches for 2026, covering all-new models, facelifts and limited editions. Four models were introduced in Q1, including the BMW M2 CS and BMW X3 30, with a further eight launches scheduled for the second quarter.

Under its Retail.NEXT strategy, the group plans to expand its presence by adding 19 outlets across 18 cities this year. The current network comprises 97 touchpoints in 40 cities. Additionally, BMW India Financial Services financed 25 percent of the vehicles sold in Q1, offering products with assured buy-back values of up to 74 percent.

Hardeep Singh Brar, President and CEO, BMW Group India, said, “BMW Group India has entered 2026 in an extremely strong position. We have achieved our highest-ever Q1 sales, registering solid double-digit growth, despite macroeconomic and geopolitical headwinds. Our lead in India’s luxury electric mobility also continues thanks to the immense trust our valued customers have put in our electric offerings in terms of performance, EV ecosystem and technology. We are geared to a pulsating 2026 that will be marked by our most ambitious product offensive, with 4 already launched and 23 more to go. Sustaining this momentum into long-term success, our unwavering focus on customer experience, aftersales and brand connect will be taken to the next level. With each new car, we aim to deliver JOY to our customers who enable this success story for BMW Group India.”

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The Indian automotive retail sales has grown 13 percent YoY with 29.6 million vehicles sold across segments in FY2026, as compared to 26.1 million units a year ago. Barring the construction equipment segment (-12 percent YoY), all segments clocked a healthy double-digit growth as per the latest data shared by the Federation of Automobile Dealers Association (FADA India).

Sales data for March 2026 points out to a robust 25.28 percent YoY growth with 2.69 million vehicles sold, as compared to 2.14 million units sold a year ago. The growth was seen across the two-wheeler segment (+28.69 percent YoY), three-wheelers (+10.52 percent YoY), passenger vehicle (+21.48 percent YoY), tractor (+10.87 percent YoY) and commercial vehicle (+15.12 percent YoY).

On the other hand, the e-rickshaw (passenger) and construction equipment industry reported a negative growth of 19.73 percent YoY and 16.17 percent YoY, respectively.

For FY2026, the two-wheeler sales came at 21.4 million units, an uptick of 13 percent YoY, as compared to 18.8 million units sold a year ago. Three-wheeler sales came at 1.36 million, up 12 percent YoY, as compared to 1.22 million units sold a year ago.

Interestingly, passenger vehicle sales grew by 13 percent YoY with 4.7 million units sold, as compared to 4.16 million units sold in FY2025. The tractor industry surpassed 1 million units with 1.05 million sold up 19 percent YoY, as compared to 882,825 units sold last year.  

C S Vigneshwar, President, FADA, said: “FY 2025-26 has been a landmark year for Indian auto retail — delivering an all-time high of 2,96,71,064 units with a broad-based 13.30 percent YoY growth that saw 5 of 6 vehicle categories set new annual records. This is not just a number — it represents the industry approaching the 3-crore mark, a milestone that would have seemed distant just two years ago. What makes this year particularly significant is that the growth was structurally sound, underpinned by improving affordability, widening mobility demand across urban and rural India, and a diversifying powertrain mix.”

He further pointed out that the sales performance for the year was not linear. “The first five months (April through August) were a period of measured momentum, with monthly growth ranging between 2 percent and 5 percent as the market navigated residual caution from the previous year’s sluggish inventory cycle, selective financing constraints and consumer wait-and-watch behaviour in anticipation of policy clarity. During this phase, enquiries remained tentative, conversions stayed uneven and the dealer community exercised understandable restraint,” he explained.

GST Rationalisation 

The FADA president highlights that the turning point arrived in September with the implementation of GST 2.0, which meaningfully reduced the effective tax burden on mass-segment two-wheelers, small cars, three-wheelers and select commercial categories – improved real affordability at a time when the consumer was already positioned to respond.

“From September onwards, we witnessed a clear inflection: the festive convergence of Navratri and Diwali in October delivered an all-time record monthly retail of over 4 million units, and the momentum carried through the remainder of the year. January, February, and March 2026 each registered strong double-digit YoY growth, validating that the upshift was not merely festive but structural,” he said.

The retail sales highlights in FY2026 for the automotive industry include – two-wheeler retails reaching pre-pandemic peaks. Passenger vehicles crossed the 4.7-million mark for the first time, growing by 13 percent. This was supported by a shift towards SUVs and alternative powertrains.

Tractor sales at record high surpassing million-unit mark for the first time due to a strong monsoon and improved farm economics.

Commercial vehicles too surpassed the million-unit mark with 11.74 percent growth, led by infrastructure demand.

Three-wheelers set a third consecutive annual record with 11.68 percent growth, where electric vehicle (EV) penetration now exceeds 60 percent.

The shift towards cleaner energy deepened throughout the year. Total EV retails reached 2.45 million units, a 24.63 percent expansion. EV market share rose to 6.54 percent in two-wheelers and 4.25 percent in passenger vehicles. CNG also strengthened its position, accounting for 21.98 percent of PV sales.

Inventory management for passenger vehicles improved, with stock levels correcting from over 50 days to approximately 28 days by March 2026. This healthily aligns wholesale dispatches with actual ground demand.

Outlook and Risks

The auto retailer body has maintained a cautiously positive outlook for FY2027, with 74.72 percent of dealers expecting growth for the full year. However, the industry is monitoring risks including the geopolitical situation in West Asia, which has caused supply disruptions for 53.2 percent of dealers. Rising fuel prices and potential logistics delays remain primary concerns for the near term.

FADA hence remains constructively cautious — structurally optimistic but operationally watchful for the next three months.

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Alpine has appointed Massimo Fumarola as Vice President Strategy & Product Performance, with effect from 1 April 2026. He will become a member of the Alpine Management Committee and report directly to CEO Philippe Krief. Fumarola replaces Sovany Ang, who is moving to a new position elsewhere within Renault Group.

Bringing more than three decades of international automotive experience, Fumarola has deep knowledge in product and portfolio strategy, project management, product development and premium brands. His career includes leadership roles at IVECO, CNH Industrial, Ferrari, Audi, Lamborghini and most recently as CEO of Morgan Motor Company, where he led that brand’s strategic turnaround.

Since joining Renault Group in 2025, he has served as Director of Renault Couture while also handling broader product and project management duties. In his new capacity, Fumarola will shape Alpine’s long‑term plans and product strategy, ensuring that brand identity, technological advances, market trends and future vehicle development remain closely aligned.

Holding a Master’s in Engineering of Industrial Technologies from Politecnico di Milano and an MBA from Cranfield University, Fumarola combines technical grounding with strategic leadership, international perspective and P&L experience. His background in high‑performance, premium and luxury vehicles will be crucial as Alpine pursues its goal of becoming a distinctive electric brand focused on performance.

Krief said, “First of all, I would like to thank warmly Sovany for her dedication, commitment and support over the last years, it has been a pleasure to collaborate with her and her team. While I wish her all the best, I will not forget her and she is now next door. I am now looking forward to working closer with Massimo. His solid expertise combining product, strategic vision and customer experience with high-end sportscars brands will certainly help us to deploy our new strategy and future product portfolio. Massimo is joining at an exciting time for the brand, as we are just starting to unveil our Alpine Performance Platform, which will be our strongest asset for our upcoming product range.”

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