With the share market in India showing signs of being affected by the developments in the Middle East, it is quite likely that the supply chains, including those that influence the auto industry, will see some signs of strain eventually if not at once. 
The likely reasons for this is the effect of an escalation in crude oil prices primarily. The others would involve shipping route disruptions such that the cargo ships carrying automotive parts, tools and equipment are unable to navigate their usual shipping lanes. This would result in delays and cost escalation as longer routes are chosen for safe passage. The example of Tesla and Volvo suspending manufacturing in early 2024 due to the conflict in the Red Sea is not yet lost. 
In terms of trade and tariffs, the conflicts and tensions between countries can be detrimental. The cost for manufacturers using materials like steel and aluminum can escalate at a rapid pace. 
With the Middle East known for its oil reserves, the current conflict and the way it is progressing is already having an effect on the crude prices. If it gets bad than this, large importing markets like India could see their crude import bills rise further. As it is, the prices of fossil fuels are already high with over 200 percent taxes. 
Any disruption in oil supply will impart considerable volatility, transportation cost increase and strain on an economy that is already fighting post-Covid inflation. 

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Tier 1 automotive supplier AUMOVIO India has announced that it has surpassed a new production milestone of manufacturing 10 million Airbag Control Units (ACUs) at its Bengaluru plant.

The facility, which commenced ACU production in 2016, supplies automotive manufacturers in India and exports to markets including Japan and Korea. The achievement was marked alongside the inauguration of a new Tire Pressure Monitoring System (TPMS) production line and the introduction of the Integrated Safety Control Module (ISCM).

The Bengaluru site has transitioned from manual assembly to an automated manufacturing environment to increase throughput and consistency. This evolution is paired with a localisation strategy where a majority of ACU components are now sourced from within India. These developments are intended to establish the facility as a central hub for safety systems within the Asia-Pacific region, supporting the requirements of global automotive original equipment manufacturers (OEMs).

AUMOVIO became an independent entity in September 2025 following a spin-off from Continental’s automotive group. The company reported sales of EUR 18.5 billion in FY2025 and maintains a global workforce of 82,000 across more than 80 locations. Its portfolio includes sensor solutions, brake systems, and software architectures for autonomous and connected mobility.

Prashanth Doreswamy, President & CEO, AUMOVIO India, said, “This milestone reflects the steady scale-up of our manufacturing operations over the past decade. Our transition towards increased automation, along with a strong focus on localisation, has enabled us to improve efficiency and build a more resilient supply ecosystem, while continuing to deliver high-quality, safety-critical systems to our customers.”

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Skoda Auto Volkswagen India (SAVWIPL), one of the leading passenger vehicle manufacturers, has announced the start of production for the new Volkswagen Taigun from its Pune facility. The model is part of the group's strategy to manufacture vehicles in India for both domestic and international markets.

The Taigun is produced with high levels of localisation at the Chakan facility. Since its introduction in 2021, the company has manufactured over 143,000 units of the model in India. Approximately 30 percent of this total production has been exported to global markets.

The vehicle is engineered to meet European driving dynamics and maintains a 5-star safety rating. The updated iteration includes design changes and features intended to improve convenience based on consumer feedback.

Piyush Arora, Managing Director & CEO, Skoda Auto Volkswagen India, said, “The start of production of the new Volkswagen Taigun underscores the maturity of our world-class manufacturing ecosystem in India. Our Indian manufacturing facilities are geared to deliver global-quality vehicles with high levels of localisation, enabling us to respond quickly to what customers demand in India and in export markets. The Taigun stands as a perfect example of this approach, engineered in line with Volkswagen’s global benchmarks and produced in India with a sharp focus on efficiency, quality, and safety. As we roll out the new Taigun, we are further solidifying India’s position as a strategic production and export base for the Group.”

Nitin Kohli, Brand Director, Volkswagen India, added, “Since its launch, the Taigun has been instrumental in strengthening the brand’s SUV strategy. It has played a pivotal role in bolstering our product portfolio for discerning Indian buyers and their aspirations. The new Taigun is central to our strategic plan for the model line-up that will drive meaningful growth. The start of production for the new Taigun at our Chakan facility is a moment of great pride for us. It continues to signify our commitment to the Indian consumers who choose to own premium German-engineered products. We are certain the new Taigun will build on the success of its predecessor and elevate customer experience.”

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Chinese automotive major Changan Automobile and CAOA have inaugurated an automated production line in Anapolis, Brazil, marking the start of local assembly for the Changan UNI-T SUV.

The ceremony was attended by President Luiz Inacio Lula da Silva and Vice-President Geraldo Alckmin, signaling a phase of industrialisation and mobility investment in Brazil.

The inauguration initiates a USD 950 million investment cycle for 2026-2028, which adds to the earlier USD 570 million invested since 2023. Total investment in the Anapolis facility reaches USD 1.52 billion with the plant now equipped to have an annual production capacity of 90,000 units.

The UNI-T was developed over three years by a team of 200 Chinese and Brazilian engineers. Key technical features include:

• Powertrain: A 1.5 Turbo GDi BlueCore Flex engine, calibrated by CAOA to operate on any ethanol-petrol blend.
• Testing: The vehicle underwent 200,000 km of durability testing across various Brazilian climates.
• Digital Features: A localised Portuguese voice control system and connected cockpit tailored for the domestic market.
• Future Roadmap: Changan plans to introduce hybrid and electrified variants, supported by the federal government's MOVER programme.

The company expects to open over 60 dealerships across Brazil during 2026 to support its expanded sales footprint.

Zhu Huarong, Chairman, China Changan Automobile Group, said, "For Changan, Brazil is not only a place to invest, but a land where we committed to building a long-term future."

Carlos Alberto de Oliveira Andrade Filho, Co-President, CAOA, added, "The UNI-T represents far more than a new model. It demonstrates that Brazil can establish itself as a global hub for high-technology automotive engineering and production."

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Bengaluru-headquartered electric two-wheeler manufacturer Ultraviolette Automotive has announced a 5-year investment plan to expand its manufacturing operations in Karnataka.

The company signed a Memorandum of Understanding (MoU) with the Government of Karnataka during the ‘Invest Karnataka’ Conclave in Bengaluru, securing proposed incentive support through the Production-Linked Incentive (PLI) scheme.

The EV maker has announced a two-phase expansion strategy to increase domestic production and support global export requirements:

Phase 1: An investment of INR 2 billion to enhance existing capacity and manufacturing at the current Bengaluru facility.

Phase 2: The establishment of a new production plant in Karnataka with an annual capacity of 150,000 units.

The plan aims to deepen local manufacturing, create employment and accelerate research and development within the electric vehicle sector. Ultraviolette currently produces the F77 performance motorcycle and the X-47 Crossover, utilising proprietary battery technology.

Headquartered in Bengaluru, Ultraviolette intends to expand its Indian retail presence from 40 to 100 cities by the end of 2026. Internationally, the company has entered 12 European countries and has scheduled further expansion into Asian and Latin American markets.

Narayan Subramaniam, CEO and Co-Founder, Ultraviolette Automotive, said, “Karnataka has been central to Ultraviolette’s vision of Making in India for the World. This proposed manufacturing expansion reflects our confidence in the state’s forward-looking EV ecosystem, talent, and policy support. The combination of infrastructure readiness, proactive governance, and long-term incentive visibility creates a strong foundation for Ultraviolette’s next phase of growth.”

Niraj Rajmohan, CTO and Co-Founder, Ultraviolette Automotive, added, “Karnataka has been home to Ultraviolette’s R&D journey from the very beginning. The state offers a unique combination of deep engineering talent, strong supplier networks, and close proximity to key industrial and manufacturing hubs. What makes this especially meaningful for us is that we have built world-class products here proving that with the right talent, ambition, and ecosystem, innovation can be created right here in Karnataka.”

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