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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Arete 22 Limited, an integrated precision aluminium mobility solutions provider, has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) as it moves towards an initial public offering. The proposed issue consists of fresh equity shares with a face value of INR 10 each, aggregating up to INR 440 crore.

The company intends to deploy the net proceeds across several priorities. Working capital requirements would receive INR 150 crore, while INR 120 crore would go towards full or partial repayment and prepayment of certain borrowings. Approximately INR 34.82 crore has been earmarked for plant and machinery at existing manufacturing facilities, with the balance directed to general corporate purposes.

Incorporated in February 2021, Arete 22 acquired Unicast Autotech Private Limited in 2026. The company manufactures aluminium alloy wheels and precision aluminium high-pressure die-cast components for automotive original equipment manufacturers. Its core business centres on alloy wheels for motorcycles and scooters, while Unicast produces high-pressure die-cast components for engines, transmissions, powertrains and structural uses.

Operating on a business-to-business basis, Arete 22 supplies directly to two-wheeler OEM customers under a build-to-print model, producing wheels according to designs and specifications set by buyers. Two alloy wheel plants support this output: a Bilaspur, Haryana, facility with 3.60 million wheels of annual installed capacity and a Kolar, Karnataka, site with 2.40 million, together totalling 6.00 million wheels and spanning roughly 27,042 square metres near major automotive clusters.

Revenue distribution has widened considerably. Karnataka led in Fiscal 2026 at INR 144.29 crore, or 26.82 percent, followed by Tamil Nadu at INR 119.47 crore, Haryana at INR 110.85 crore and Uttarakhand at INR 91.60 crore. Andhra Pradesh and Rajasthan added INR 37.00 crore and INR 33.16 crore, respectively, a marked change from Fiscal 2024 when Tamil Nadu alone represented 76.85 percent.

Financial and operational metrics have climbed sharply. SKUs expanded from 9 to 49 between Fiscal 2024 and Fiscal 2026, wheels sold rose from 745,000 to 3,179,000 units and revenue per wheel grew from INR 1,457.58 to INR 1,671.46. Revenue from operations reached INR 537.95 crore from INR 112.46 crore, while profit after tax rose to INR 44.97 crore from INR 2.92 crore and EBITDA to INR 94.68 crore from INR 13.79 crore. Unistone Capital Private Limited is banker to the issue, with Bigshare Services Private Limited as registrar.

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Toyota Kirloskar Motor (TKM), one of the leading passenger vehicle manufacturers, has released its Sustainability Report 2026, titled 'Progress that Powers Everyone', outlining the company's environment, social and governance (ESG) performance and manufacturing operations in India.

The report was presented by Ramalinga Reddy, Minister of Forest, Ecology & Environment for the Government of Karnataka, alongside B. Padmanabha, Senior Executive Vice President of Manufacturing at Toyota Kirloskar Motor.

In its product operations, the company maintains a multi-pathway powertrain strategy encompassing hybrid electric vehicles, battery electric vehicles, hydrogen technologies and alternative fuels. Hybrid models from Toyota represent approximately 80 percent of total hybrid vehicle sales in India, while the company introduced the Urban Cruiser Ebella as its first battery electric vehicle in the domestic market.

In manufacturing operations, Toyota Kirloskar Motor operated its facilities using 100 percent renewable electricity for the fifth consecutive year, eliminating Scope 2 greenhouse gas emissions. The company reported avoiding over 594,000 tonnes of carbon dioxide emissions since FY2012-13, while recycling more than 95 percent of manufacturing waste and sourcing over 90 percent of its operational water through recycling and rainwater harvesting.

Ramalinga Reddy said, "Environmental protection cannot remain confined to policies alone; it must become a habit that is reflected in the choices we make every day. Whether it is conserving water, reducing waste, adopting clean energy or preserving biodiversity, every effort counts. Industries have a significant role in leading this transformation because their actions influence people, communities and future generations. TKM's Sustainability Report 2026 is a reminder that sustained commitment and collective action are essential for building a greener and more resilient India."

B Padmanabha said, "At Toyota, sustainability is an integral part of how we create value for society. Guided by the Toyota Way and our commitment to ‘Producing /spreading Happiness for All', we continue to balance sustainable business growth with environmental stewardship and social progress. This Sustainability Report reflects the collective efforts of our employees, suppliers, dealers, and partners in advancing carbon reduction, resource efficiency, community development, and responsible governance. While we are encouraged by the progress made, we remain committed to continuous improvement and to contributing to a cleaner, safer, and more prosperous future for all. We believe that true success lies not only in making ever-better products, but in creating lasting value for society and future generations."

On human capital and community development, Toyota Kirloskar Motor trained over 140,000 individuals through the Toyota Technical Training Institute and partnerships with 120 Industrial Training Institutes and 30 Government Tool Room & Training Centres. During FY2025-26, the company allocated over INR 1,047 million towards corporate social responsibility initiatives covering education, healthcare, sanitation, water conservation, road safety and environmental restoration.

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Maharashtra-based Abhijeet Dies & Tools and Italy's INEVO have signed an agreement establishing a joint venture entity, Abhinevo Technologies.

Headquartered in Pune, the new JV will develop, engineer, manufacture and commercialise moulds, tooling and manufacturing technology solutions for the automotive and plastics-processing sectors.

The agreement combines Abhijeet’s four decades of tooling and plastics manufacturing operations with INEVO’s European high-precision injection mould technologies. The new entity intends to localise manufacturing technologies in India across the value chain, covering product and process engineering, tool design, simulation, manufacturing, trials, validation and production support.

Jayamurugan Thangavel, CEO, Abhijeet Group, said, “This joint venture marks an important step towards technology-led manufacturing. By combining INEVO’s specialised European technology with Abhijeet’s engineering and manufacturing capabilities, we aim to build advanced capability in India and create a platform serving Indian and global customers.”

Abhijeet Raut, Director, Abhijeet Dies & Tools, said, “The real value of this partnership will be in taking advanced technologies from concept to industrialisation. Through Abhinevo, we aim to give customers access to sophisticated tooling and manufacturing solutions with closer engineering collaboration, faster development and globally benchmarked quality – converting technology into robust, repeatable and commercially viable manufacturing solutions.”

INEVO, spun off from the mould division of INglass in 2020, exports over 80 percent of its output globally, producing more than 100 injection tools per year. Its specialisation covers multi-material and multi-colour moulding, automotive lighting tooling, In-Mould Decoration (IMD), In-Mould Labelling (IML), injection on decorative and functional foils and surface technologies.

Roberto Fagarazzi, Managing Director – Sales, INEVO, said, “India is becoming increasingly important in the global automotive manufacturing landscape, and customers are looking for greater localisation without compromising technology, quality or manufacturing performance. We see a strong opportunity to bring INEVO’s experience in advanced moulds, multi-material technologies, smart surfaces and industrialisation closer to this market.”

“Abhijeet has a strong tooling and manufacturing foundation, engineering resources and an established automotive presence. The combination of INEVO’s specialised technology with Abhijeet’s manufacturing expertise creates a strong platform for long-term development. Our ambition is to develop solutions together in India, build local technical competence and progressively create opportunities that can serve customers both in India and internationally,” he added.

The initial technology scope for Abhinevo Technologies will encompass 2K and multi-component mould technology, polyurethane-based surface applications, IMD, IML, In-Mould Coating, film integration and process simulation. These processes target automotive interior and exterior components, functional panels, and smart surfaces for domestic automotive OEMs, Tier-1 suppliers and international export markets.

Nikhil Raut, Director, Abhijeet Dies & Tools, said, “This partnership is more than a business agreement. It brings together two companies, cultures and capabilities with a shared ambition to create something meaningful and long-lasting, built on trust, teamwork and mutual respect. The true success of Abhinevo will be measured by what our teams create together, the value we deliver to customers and the trust we build over the years ahead.”

Consultancy firm Crescendo Worldwide facilitated the partnership process, initiating partner identification in early 2025, which led to a Memorandum of Understanding in June 2025 prior to the final joint venture execution in September 2026.

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Chinese automotive companies NIO Holding Co, and Zhejiang Geely Holding Group Co, have entered into a strategic agreement covering technology, operations and capital investments across their charging and battery swapping businesses. The partnership includes cross-equity investments, joint technology development and network integration.

As per the agreement, Geely Holding Group will acquire a 30 percent equity stake in NIO Power. The transaction involves Geely transferring a 100 percent equity interest in its battery-swapping subsidiary, Yiyi Power, to NIO Power, alongside a cash investment of RMB 640 million.

Following the completion of the deal, Yiyi Power's commercial fleet swapping operations will be integrated into NIO Power's infrastructure. In exchange, NIO will acquire a 10 percent equity stake in Geely's charging subsidiary, Haohan Energy, establishing interconnected charging networks between the two companies.

The agreement includes provisions for the co-development of unified battery swapping technologies and standards for passenger vehicles. Geely will design battery-swappable models compatible with NIO Power's swapping stations, while NIO Power will provide battery swapping services for these vehicles.

William Li, Founder, Chairman and CEO, NIO, said, “Over the past decade, China’s smart EV industry has made remarkable progress, driven by rapid advances in technology and continued innovation. Looking ahead, the industry needs not only to keep innovating, but also to become more efficient at turning innovation into value. This partnership brings together the strengths the two sides have built over the years, with closer collaboration across technology, standards, operations, assets, and capital. It represents an important exploration and innovative step toward addressing involution-style competition and building a more open and mutually beneficial industry ecosystem where automakers can work together to achieve high-quality growth. The collaboration between NIO and Geely in charging and battery swapping is open to the broader industry. We welcome and look forward to more industry peers joining us in creating a better recharging experience for users, supporting the industry’s transition to low-carbon, green energy, and shape a sustainable and brighter future.”

Andy AN Conghui, CEO, Geely Holding Group, said, “High-quality development of the automotive industry is not about scale alone. It calls for more resilient supply chains, higher quality and greater efficiency, safer and greener development, and a more open and collaborative ecosystem. Recharging networks are public infrastructure that serve society as a whole. They should be built together, shared openly, and connected across networks, so that users ultimately benefit the most. Geely Holding Group has long driven innovation in core new energy vehicle technologies, building an all-scenario recharging network that combines charging and swapping. This partnership marks another step toward the high-quality development of China’s intelligent connected new energy vehicle industry. With an open approach and a long-term commitment, Geely Holding Group will work with NIO and other industry partners to build a denser, more reliable, and safer recharging network, making mobility more seamless and worry-free for users.”

As of September 2026, NIO operates a network of 9,433 infrastructure sites in China, comprising 4,126 swapping stations and 5,307 charging locations housing 30,598 charging connectors. The company has set a target to operate 10,000 swapping stations by 2030.

Geely's charging unit, Haohan Energy, currently operates 2,500 charging stations with 12,000 connectors across 232 cities, with plans to expand to 22,000 stations containing over 100,000 connectors by end-2027.

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