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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Chennai-headquartered electric vehicle company Raptee.HV has opened an electric mobility Centre of Excellence at Rajalakshmi Engineering College, establishing an industry-academia partnership focused on electric vehicle technology.

The new facility, inaugurated on World EV Day, is spread across 3,000 square feet and will operate under the Raptee.HV Academy initiative will introduce industrial exposure and prototyping tools to academic institutions.

The project represents an INR 5 million investment and accompanies a Memorandum of Understanding signed between Raptee.HV and Rajalakshmi Engineering College. The agreement covers industrial training, site visits, guest lectures, internships, academic courses and research projects.

It is designed for students across electrical, electronics and automotive engineering; the laboratory contains a Raptee.HV T30 motorcycle, core electric vehicle components, a stripped motorcycle fitted with digital twin technology and equipment for testing battery packs, electric motors, power electronics, charging systems, vehicle communications and diagnostics.

Dinesh Arjun, Co-Founder and CEO, Raptee.HV, said, "The next generation of mobility will be built by engineers who understand the machine from the cell to the software. But you cannot build that understanding from a classroom alone. You have to get your hands dirty, take systems apart, question how they work, experiment and build again. The HV Lab is our attempt to bring that experience into engineering education. If even a few students walk out of this lab wanting to build the next great EV technology, we have done our job."

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Zuno General Insurance has launched Fuel Guard, a car insurance add-on offering financial protection against component damage caused by manufacturer-approved blended fuels.

The policy addition targets private motor vehicles in India as alternative and blended fuel adoption expands across the country. The coverage applies to specified engine and fuel-system parts in cases of accidental or unforeseen damage arising directly from approved blended fuel use.

At present, the insurance cover eligibility is restricted to private cars registered on or after 1 April 2023, provided the vehicle manufacturer has endorsed the specific fuel blend used. Vehicle owners must adhere to the manufacturer's prescribed maintenance schedule without making unauthorised modifications to the engine or fuel system. Fuel Guard can be added to private car package policies, standalone own-damage coverage, bundled options and three-year long-term policies.

Shanai Ghosh, Managing Director and CEO, Zuno General Insurance, said, "At its core, Fuel Guard is built around a simple idea: as the mobility ecosystem evolves, insurance protection needs to evolve with it. At Zuno, we continuously look at how changes in mobility are shaping customer expectations and ownership experiences. Fuel Guard reflects our effort to translate those insights into simple, practical solutions that make protection more relevant in everyday life."

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JSW Group and Volkswagen Group have signed a non-binding memorandum of understanding (MoU) for a proposed 51:49 alliance involving JSW Green Mobility Limited and Skoda Auto Volkswagen India Pvt Ltd. No official statement or press release has been issued by either the JSW Group, Skoda/Volkswagen yet regarding the development. 
“The signing of the non-binding MoU has actually taken place,” claimed an industry source. Pointing at the news in Economic Times, he said, “The non-binding MoU paves way for further negotiations between the two organisations in terms of valuation and other factors.” 
“The non-binding MoU would explore setting up of a strategic joint venture in India that would develop, manufacture and sell passenger vehicles for the domestic as well as international markets,” he added. 
Stating that the nature of vehicles would include ICE, electric and hybrid powertrain ones, the source averred, “The non-binding MoU would pave the way for internal approvals, regulatory clearances and other nitty-gritties such as sourcing, manufacturing, technology, localisation, management etc. before a concrete structure is engineered by both the companies and the groups that control them by the end of this year or early next year. 
Entering India is 2000, Skoda, the Czech passenger vehicle arm of the Volkswagen Group has been driving activities for Volkswagen and Skoda brand of vehicles in India. While the Chakan (Pune) plant has been under Volkswagen, the Shendre MIDC (Chhatrapati Sambhaji Nagar) plant has been under Skoda. The Volkswagen Group premium luxury vehicles of the Volkswagen, Skoda and Audi brand are assembled at the Shendre MIDC facility. It has been some time that the Volkswagen Group is looking to turn the Indian operations into a regional hub catering to the immediate neighbouring markets among others. 
Holding a 35 percent stake in JSW MG Motor India, which involves SAIC Motors and is separate from JSW Green Mobility, the JSW Group has presence across steel, infrastructure, energy, cement, paints and automobiles. While there have been reports indicating plans to increase its holding to 45 percent in JSW MG Motor India, the Group has committed up to USD 3 billion over five years in investment in its automotive arm, which includes the building of a greenfield manufacturing footprint at Chhatrapati Sambhaji Nagar. 
The development about the non-binding MoU between JSW Group and Volkswagen Group, the source claimed, has taken place at around the same time the CEO of Skoda Auto, Klaus Zellmer, and the CEO of Volkswagen, Thomas Schäfer, were visiting India. 
 

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Japanese automotive major Honda has become the first company globally to earn a five-star rating in the products and services category of the FIA Road Safety Index. The award was presented at the Autodromo Nazionale Monza during the FIA Formula One Italian Grand Prix.

The FIA Road Safety Index measures organisational impacts on road safety across operations, supply chains, products and services. The FIA expanded the index from a 3-star to a 5-star framework, introducing modules for planning, performance monitoring, safety culture management and supply chain or product coverage.

To qualify for the updated framework, Honda expanded its assessment scope to cover 17 countries, representing over 90 percent of its global motorcycle and automobile sales volume. The evaluation reviewed Honda's safety governance, global fatality tracking, safety technology deployment and traffic safety data disclosures. The company maintains targets to halve traffic collision fatalities involving its vehicles per 10,000 units sold by 2030 compared to 2020 levels, with a long-term goal to eliminate traffic collision fatalities by 2050.

Mohammed Ben Sulayem, President, FIA, said, “Road safety remains one of the world’s most urgent challenges, and no single organisation or sector can address it alone. Progress depends on action at scale across the public and private sectors, uniting all stakeholders around our shared goal of saving lives on the road. The FIA has an important role to play in accelerating that change for road users worldwide. Alongside our work with companies, we encourage governments to consider how the FIA Road Safety Index methodology can support regulatory compliance frameworks and strengthen road safety standards globally. We aim to build a shared culture in which road safety is recognised as a fundamental responsibility. I congratulate Honda on leading the way and becoming the first organisation to receive five stars.”

Willem Groenewald, FIA Secretary General for Automobile Mobility, Sustainability and Tourism, said, “The expansion of the FIA Road Safety Index to five stars marks an important step in our ambition to make road safety a measurable and accountable part of corporate decision-making. Organisations worldwide have a significant influence on road safety through their operations, employees, products, services and supply chains. With this expanded methodology, they can not only understand that impact more broadly, but set targets, measure progress, showcase in-depth commitment and continuously improve their performance. Honda becoming the first organisation to achieve the new five-star rating demonstrates the level of ambition we want the Index to inspire. We hope this milestone will encourage many more organisations across the public and private sectors to measure their road safety footprint and take concrete action to save lives.”

Mikihito Kojima, Assistant Vice-President and General Manager of Traffic Safety Promotion Operations, Honda Motor Co, said, “We are deeply honoured that Honda safety initiatives have received the 5-Star rating, the highest recognition in the FIA Road Safety Index. At Honda, our goal goes beyond delivering safer products. We look to the safety of each and every customer who uses our products, and everyone sharing the road around them. Through the advancement of our safety technologies, activities to promote safe driving and riding practices, and a clearer understanding of how traffic collisions occur so that we can keep improving, we work to reduce the number of traffic collisions themselves. The FIA Road Safety Index brings visibility to corporate road safety efforts, and has given us a clearer view of where we stand today and of what we need to address next. We see this recognition as an important milestone on the way to our challenging goal of achieving zero traffic collision fatalities involving Honda motorcycles and automobiles globally by 2050, and we will continue to take on that challenge. We also hope that the FIA Road Safety Index will encourage broader commitment to road safety among companies and organisations worldwide beyond individual companies and industries, helping to drive road safety forward across society.”

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