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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The Honda India Foundation (HIF) has held a ground-breaking ceremony for a Road Safety Centre of Excellence (CoE) in Viramgam, Gujarat.

The centre is designed to provide road safety education through training and simulation-based learning. It is scheduled to open in 2027 and is expected to provide safety programmes for 5,000 people each year.

The CoE will feature a Road Safety Education & Awareness Wing equipped with training tools for students, youth groups and local communities. Additionally, it will include an Accident Research & Data Analytics Unit to examine traffic patterns, identify risk locations and assist with safety audits.

Vinay Dhingra, Trustee, Honda India Foundation, said, “Road safety requires a combination of awareness, training and data-driven insights. Through this Centre of Excellence, we aim to create a practical platform that supports safer road behaviour, promotes road safety education and contributes to more informed safety interventions. This initiative reflects Honda India Foundation's continued commitment to strengthening road safety awareness and fostering safer road-use practices at the community level.”

Gyanender Singh Malik, Director General of Police, Gujarat State, said, “We appreciate Honda India Foundation’s support in setting up this Road Safety Centre of Excellence in Gujarat. The Centre will help strengthen structured road safety education and support data-led interventions for safer roads. Such collaborations add value to the state’s efforts towards improving road safety awareness and reducing road accident risks.”

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French automotive major Renault India has further deepened its India commitment with strengthening of its design team in the country.

The company has roped in Jean-Philippe Salar as the new Design Director at Renault Design Centre India. He succeeds Julien Sabatier, who is set to take on the role of Head of Design Factory India and UI Management.

Sabatier led the Design Studio for the last three years and, on his part, was instrumental in setting up Renault’s Design Studio in India as part of the French automakers ‘renault. rethink’ strategy. He delivered over 10 projects for Renault for both India and Europe market and played a key role in the introduction of the new Duster SUV in India.

In his new role, he will focus on developing and industrialising future projects and implementing UI (User Interface) functions in India.

Salar is a Renault Group veteran having started his journey with the French automotive brand in 1996, and has extensive design experience across brands such as Renault, Dacia, LADA and Mobilize.

The design centre is part of the company’s ‘design in India’ and ‘make in India’ strategy. It functions as a hub of excellence, particularly due to its proximity to Renault Nissan Technology & Business Centre India (RNTBCI).

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China’s SAIC Motor-owned British marquee brand MG has unveiled its technology roadmap centred on its next-generation Plug-in Hybrid+ systems, SolidCore battery integration and advanced driver assistance systems (ADAS) at MG Tech Day at its UK headquarters in London.

The automaker unveiled its new Plug-in Hybrid+ system, which features 1.1-litre and 1.5-litre turbocharged petrol engines. The company states that it achieves thermal efficiencies exceeding 42 percent. The powertrain incorporates a hybrid transmission with two technologies: Power Split and Motor Decoupling. The latter isolates the generator during electric driving to improve energy efficiency.

The first model to feature this system will be the MG ZS Plug-in Hybrid+, scheduled for launch in 2027.

MG also confirmed the introduction of its SolidCore battery across future Plug-in Hybrid+ models. This semi-solid-state technology is designed to provide consistent power delivery and range stability across various temperatures and driving conditions. The battery will debut in three upcoming B, C and D-segment SUVs.

Furthermore, MG is refining its driving assistance technologies using data collected from over 1.2 million kilometres of driving across 24 European countries.

The One Touch iAD system for parking is production-ready, supporting scenarios such as kerbside parking, reverse paths of up to 100 metres and exit manoeuvres in tight spaces.

A highway assistance system capable of managing motorway entry, exit and lane changes is scheduled for a late 2027 debut in a new MG SUV. Urban NOA capabilities are planned for 2028.

Lastly, the company is conducting Level 4 Robotaxi trials across Europe, the Middle East and China to support long-term mobility research.

MG company stated that these developments reflect a focus on ‘making advanced technology more accessible, useful and relevant for everyday drivers.’

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Stellantis-owned Peugeot and the Strate School of Design have formed a partnership to focus on design and innovation within the automotive sector. Through this collaboration, students will work on projects related to mobility, user experience and technology under the guidance of Peugeot design experts and Strate faculty.

The initiative aims to provide Peugeot with access to student designers while offering students experience in the automotive industry. The projects are intended to act as a laboratory for mobility solutions.

Matthias Hossann, Design Director, Peugeot, said, "This partnership reflects our commitment to bringing academia and industry closer together, in order to foster innovative solutions to the challenges of sustainable mobility. It also enables us to engage with and support young design talents from the earliest stages of their educational journey."

Mike Levy, Head of the Transportation and Mobility Design Department, Strate School of Design, said, "This collaboration provides our students with an exceptional opportunity to confront the realities and ambitions of an industry undergoing profound transformation. By working alongside an internationally renowned automotive design team celebrated for its boldness, they gain first-hand experience of its methodologies, expertise, and high standards. In return, it offers PEUGEOT valuable insight into how this new generation of designers envisions its design practice, its perception of the brand, its relationship with mobility, and the future narratives that shape it."

The partnership is intended to combine academic and industrial perspectives to develop designers for future mobility and vehicle projects.

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