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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Maruti Suzuki India, the country’s largest passenger vehicle manufacturer, has reported its highest-ever annual production with 2.25 million units produced in CY2025.

This also marks the second year the automaker surpassed the 2 million units production threshold. The total includes vehicles destined for the domestic market, exports and supplies to other original equipment manufacturers (OEMs). The Fronx, Baleno, Swift, Dzire and Ertiga were the five models with the highest production volumes during this period.

The company began operations in 1983 at its facility in Gurugram and has since expanded its manufacturing footprint to include sites in Manesar and Kharkhoda, alongside the integration of its Gujarat plant.

At present, Maruti Suzuki India produces 17 models and 650 variants. To address future demand in India and abroad, the firm intends to increase its total production capacity to 4 million units per annum.

Hisashi Takeuchi, Managing Director & CEO, Maruti Suzuki India, said, “This record production is a result of the dedication of our employees and the strong synergy that we share with our supplier partners. A high degree of localization has enabled us to achieve such scale while maintaining world-class quality, highlighting the strength and global competitiveness of India’s automotive manufacturing ecosystem. We remain committed to expanding our manufacturing footprint and strengthening India’s automobile manufacturing capabilities in line with the Government of India’s ‘Make in India’ initiative.”

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Belrise Industries (formerly Badve Engineering), an Indian automotive systems manufacturer, and Plasan Sasa, an Israel-based provider of armour and survivability solutions, have signed a strategic agreement to develop solutions for the Indian military market. The collaboration focuses on the ATEMM (All-Terrain Electric Mission Module) systems.

The ATEMM is a self-propelled electric platform designed to increase payload capacity, energy supply and mobility for armed forces. The partnership aims to adapt this platform for the specific requirements of the Indian defence sector.

The agreement outlines three primary goals for the collaboration:

• Market Entry: Jointly introducing the ATEMM platform for military applications in India.
• Localisation: Aligning with the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives through local production and technology transfer.
• Global Integration: Integrating Belrise into Plasan’s global supply chain to enable the production of Plasan’s systems in India for international markets.

Swastid Badve, Chief of Staff, Belrise Industries, said, "This partnership agreement represents a significant milestone in our journey to bring world-class defence technologies to India. By combining Belrise’s manufacturing capabilities with Plasan’s innovation, we are confident in delivering solutions that meet the evolving needs of the Indian Armed Forces."

Gilad Ariav, VP Marketing & Business Development, Plasan Sasa, said, "We are proud to partner with Belrise Industries, a company that shares our vision for innovation and excellence. Together, we will not only serve India’s defence requirements but also strengthen our global supply chain with cost-effective production from India."

The partnership combines Plasan’s experience in survivability and automotive engineering with Belrise’s manufacturing infrastructure in India to support long-term defence programmes.”

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Jaya Hind Industries (JHI), part of the Dr Abhay Firodia Group, held a groundbreaking ceremony for the expansion of its manufacturing facility in Kottaiyur Village, Thiruvallur District.

The project involves an investment of approximately INR 2 billion towards increasing capacity and integrate manufacturing processes for high pressure die casting and components for internal combustion engines, electric vehicles and structural castings.

The expansion includes a new shed covering 13,000 square metres, and once complete, the facility will have a manufacturing capacity of 20,000 tonnes per year.

The facility is designed to provide end-to-end process control. Jaya Hind Industries will include the following in-house operations: machining and honing, powder coating, heat treatment and impregnation.

These additions allow the plant to function as an integrated unit. The expansion follows the utilisation of existing capacity due to orders from domestic and export customers. The Chennai plant supports clients including Cummins (USA), Generac (USA), TVS Motor Company and manufacturers of EV modules.

Prasan Firodia, Managing Director of Jaya Hind Industries, said, “This expansion marks a significant milestone in Jaya Hind Industries’ growth journey. With strong order momentum across domestic and export markets, the Chennai facility will play a pivotal role in augmenting our die-casting capacity while deepening our vertical integration. By investing in advanced HPDC & machining capabilities and critical in-house processes, we are strengthening our ability to deliver high-quality, complex aluminium solutions with greater control, consistency, and speed. This project also reinforces our commitment to building globally competitive manufacturing capabilities in India in line with the Make in India vision.”

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Volkswagen-backed German battery company PowerCo has commissioned its factory in Salzgitter and produced the initial Unified Cells. This start of production allows the Volkswagen Group to design and produce battery cells in Europe.

The cells will be delivered to Volkswagen Group brands for road tests, which are expected to be utilised in the Electric Urban Car Family of Volkswagen, Skoda and Seat/Cupra next year.

PowerCo intends to provide 50 percent of the demand for Unified Cells within the Volkswagen Group, with the remainder coming from suppliers. The architecture allows for use across brands and regions. It supports technologies including lithium iron phosphate (LFP), nickel-manganese-cobalt (NMC) and solid state.

The version produced in Salzgitter uses NMC technology. This cell provides an increase of 10 per cent in energy density compared to previous models. It is designed for use with the cell-to-pack system.

Oliver Blume, CEO, Volkswagen Group, said, "The PowerCo Gigafactory in Salzgitter sends a strong technological signal for Europe and serves as a cornerstone on our path to becoming a global automotive tech leader. We are the first European carmaker to establish our own battery cell development and production. This step strengthens our position and independence in the global competition."

Production in Salzgitter will increase during the coming year. The facility has an initial capacity of 20 GWh, with the potential to reach 40 GWh. Salzgitter serves as the lead plant for factories in Valencia, Spain and St. Thomas, Canada. These sites follow a factory concept that allows for the exchange of knowledge.

The Research & Development centre in Salzgitter is also expanding. A test field is under construction and will begin operation at the start of 2026.

Thomas Schmall, Group Board Member for Technology, Volkswagen, said, "With PowerCo, we are consistently expanding our know-how in battery technology. In combination with the new battery system, the Unified Cell ‘made in Salzgitter’ brings a real technological leap for our customers. This puts us in the driver’s seat when it comes to a key technology for e-mobility."

Production involves automation and data analysis. Data points from machines and buildings provide traceability and assist quality control.

Frank Blome, CEO, PowerCo, said, "In just three years, we have built an entirely new company, developed a competitive product, and completed a cell factory along with its upstream supply chain. At the same time, we are already constructing the next cell factories in Spain and Canada. In short: we deliver. This achievement is the result of an outstanding team effort by many colleagues at PowerCo and Volkswagen – and I’m deeply grateful for that."

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