With the exciting range of autos being offered in the Indian market, the question that is being increasingly asked is about the pricing. Are Indian cars overpriced? Ravi Shankar from Chennai said that his plan to upgrade to a new car from his current stead – a 2013 model Volkswagen Polo GT TSI – threw some weird challenges. “The Hyundai Alcazar with a starting price of INR 1,700,000 and Skoda Kushaq with a starting price of INR 1,700,000 lakh look overpriced. Considering the fact that localisation has gained since I bought my Polo, the car prices should go down rather than go up. My Polo, with an imported TSI engine and a DSG transmission, cost INR 930,000 lakh. The Polo GT TSI on offer today is priced at INR 1,174,000 approximately in Chennai,” said Ravi. He added, “Should the price not go down rather than go up?” Mahesh Murthy from Bangalore said that he has postponed his plan to upgrade from his 2012 Punto. He finds the current car prices exorbitant. 

A car dealer from Delhi expressed on the condition of not revealing his name that the interpretation or inference of a product being overpriced lies with the buyer. Cars today offer more creature comforts, safety and powertrain combinations, he said. This should justify their price, he added. Stating that a sub-four metre car costing close to or more than INR 1,500,000 is discomforting, Vikram Jagtap of Pune said that cars like these fit in a tax bracket that ensures a significant tax rebate. Asked if this was because of the regulations and features, he answered that the he is not certain if the addition of technologies and features like BS VI, airbags, ABS, ESP and EBD would lead to such a price escalation. Saikat from Kolkata averred cars like the Mahindra XUV300 and Tata Nexon offer among the best safety aspects if the preconception of buying a ‘big’ car at INR 1,500,000 is set aside. They offer a long list of safety features like seven airbags, ESP, ISOFIX seats, ABS, EBD, 5-Star GNCAP rating and more, he added. 
 

Is it features?
Rohan Srivastava from Kanpur informed that the long list of features in today’s new cars is their differentiator as well as a catalyst for price increase. They, to an extent, justify the price increase. The other factors include inflation, which has in turn led to a jump in raw material prices, he added. Drawing attention to the near 40 percent jump in steel prices, which has affected his business, Srivastava said that some Indian car segments are reasonably priced. Srivastava drives a Hyundai. Neelkanth Sawant, a marketing professional from Pune, who drives a Maruti, said that car prices have kept pace with inflation. What failed to keep up with the pace are salaries in most jobs. “It is therefore that those looking to upgrade their cars seven-to-ten years down the line are finding it difficult to choose a new set of wheels costing 1.5 to two times more,” he added. Of the opinion that an INR 10,00,000 priced car of yesteryear lacked features like airbags, ABS, EBD, touchscreen, longer warranty coverage, parking sensors, auto wipers and head lamps, sun roof, climate control and connected car tech, an auto enthusiast from Hyderabad said that factor in inflation, and it is not illogical to have the current version of the same model cost INR 1,700,000.  

Raveeraj from Bangalore averred manufacturers are pricing their autos as per the customer’s willingness to pay. The fact that most cars are well-equipped does not mean that they are overpriced, he added. Ajit Powar of Pune expressed cars in India tend to be overpriced than in many other markets of the world. They also tend to differ in quality, he quipped. Is it because laws concerning autos are perhaps not as strict as in the UK or the US? Powar could not provide a definitive answer. An industry observer stated that he has seen some companies practice a culture of using different materials in cars that they export. The grade of steel they use differs, the quality and thickness of paint they use differs and even the amount of insulation or features they offer is different, he said. This, he claimed, is done to address the stringent safety and other requirements of the export markets. In terms of emissions and safety, we lag behind the European and US markets, and yet the cars made in India are priced high. This has largely to do with the taxes and high cost of doing business, he explained. Ram Naresh of Hyderabad said that the TUV300 he bought in 2017 cost him INR 1,250,000 on road. On the top of it, he paid INR 250,000 as the loan interest. He spent around INR 50,000 on accessories. The total cost came to about INR 1,550,000. What he spent on diesel, service, spares, insurance etc. would amount to another INR 150,000 to INR two-lakh. Looking at upgrading to a new car, he is finding the prospect of spending INR 150,000 on a sub-four metre vehicle weird. 

Inflation, weak Indian rupee, taxes, policies or greed?
Ram Naresh’s search of the low-end versions of cars has made him conclude that they are overpriced. “The Harrier XE, for example, is quite bare bone,” he said. “I have decided to postpone my decision to buy a new vehicle. I am now looking for a used car instead,” he added. Blaming inflation, weakening Indian rupee, the greed of automakers to make huge profits and the knee jerk reaction of authorities, Rohit from Indore said that it is high time cars are looked upon as a necessity and taxed accordingly. Bala from Chennai averred that tax policies have led to a great extent for cars to be highly overpriced. Electric cars are also not being spared, he rued. Look at the prices of electric cars and it does not look like the government is encouraging them, he quipped. Dev Tahalwani, who operates a three-wheeler, said that he finds the price of the new Mahindra Treo Zor electric three-wheeler high. And, if I avail finance, the cost is going further up, he complained. Expressing surprise over the recent EY survey report about buyers being ready to pay a premium of up to 20 percent, an industry source mentioned that the price of electric cars on offer in India is definitely high. The operating costs of such vehicles, their range, their reliability and their usability in terms of infrastructure are values that are yet not clear. 
 

Checks and balances?
Of the opinion that law makers in US and Europe are far more aware and sensitive to the sentiments of buyers and the general public, an industry observer said that the situation in India has not matured as much. The level of checks and balances governing automakers in the US and Europe are simply not there, he added. Stating that inflation, depreciating Indian rupee, ever increasing taxes, availability of high tenure loans and stagnating incomes have already driven car prices to insane levels, Robin from Chennai mentioned that a good upgrade for a reasonable amount after four-to-five years is no longer in sight. Sanchit Chari from Bangalore said, “Taxes have remained the same for the last few years. When GST was rolled out, the rates were set to what the combination of pre-GST rates were (VAT, state taxes etc.). So, they are not the cause of price hikes. Their increase has been one-to-two percent, whereas the car prices have moved up by almost 30 to 50 percent during the same period.” “It needs to be investigated if the addition of safety and emission technologies as well as features would lead to an increase in prices to such a level,” he averred. Rajesh Tandel from Mumbai drew attention to the price escalation in some of the long running cars in India like the Toyota Innova. In 2005, the vehicle was launched at a starting price which was no more than INR seven lakh, he said. Today, he mentioned, the starting price of the same vehicle is no less than INR 1,600,000 lakh. An increase of INR eight-lakh for a product line that is not drastically different from that of 2005 is hard to grasp, he added. 

A Delhi-based industry source expressed that the level of taxes on an automobile (there’s GST and a compensation cess of 48 percent, the enormous registration tax that is a state subject and continues to rise time and again), regulatory requirements and the cost of doing business are responsible for the costs rising so much and so often in at least the last one year. The average buying capacity of an Indian buyer has not risen in line, he informed. Explaining that INR 10,00,000 (roughly USD 13,000) is more or less the same amount of money incurred to develop a modern car – a compact SUV or a typical sedan – in comparison to other markets the world over, the source said that it is the tax component that needs to be looked at. Of the opinion that taxes would amount to a good portion of the prices paid to buy cars, Rohit remarked, “The increase in car prices is mainly due to base increases by manufacturers. Taxes are a percentage of base price and increase as the base price increases.” “If one wants to compare prices of cars with those that are also found in the US, he or she could compare the ex-showroom price there and the ex-showroom price here,” he explained. Doing the same some years ago, Rohit concluded that the base price of a car in India is a bit higher than in the US. This, despite the higher labour and regulatory cost in that country. 

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Stellantis-owned Jeep India has launched the Jeep Compass 85th Anniversary Edition, limited to 85 units at prices starting at INR 2.67 million (ex-showroom).

The anniversary edition incorporates visual updates to the exterior and interior of the vehicle platform. External changes include 18-inch alloy wheels finished in gloss black alongside anniversary badging. The interior cabin features a black colour scheme paired with gold accents and contrast trim detailing.

Kumar Priyesh, Business Head and Director of Automotive Brands, Stellantis India, said, "The Jeep Compass has always been central to the Jeep story in India, bringing the brand's legendary capability, design and authenticity to customers who expect more from their SUV. As Jeep celebrates 85 years globally, the Compass 85th Anniversary Edition gives this iconic nameplate a distinctive new expression. With exclusive anniversary-inspired styling, curated accessories and safety technologies, this special edition has been crafted for customers who seek a Compass that feels even more personal, intelligent and exclusive."

The vehicle is offered with optional accessory packages under the brand's personalisation options. These packages add functional and cabin features, including sunroof illumination, ambient lighting, a digital inner rear-view mirror and integrated front and rear dashcams. Bookings for the limited-run vehicle have opened across the company's dealership network and online sales platform.

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German luxury car brand Mercedes-Benz India has opened its new sales facility in Lucknow in partnership with dealership operator T&T Motors. The outlet expands the company's network in Uttar Pradesh to 10 touchpoints across cities including Lucknow, Noida, Ghaziabad, Agra, Kanpur and Varanasi, contributing to a national presence of over 150 locations across more than 60 cities.

The new facility occupies 9,000 square feet, including over 5,000 square feet of carpet area and was completed in five months. The showroom accommodates four vehicle display bays, private and semi-private consultation zones, a lounge section for vehicle lines and a dedicated delivery bay. To support battery electric vehicles, the location incorporates a 180 kW DC fast charger with two charging bays, backed by a staff of 88 employees.

Brendon Sissing, Vice-President of Sales and Marketing, Mercedes-Benz India, said, “Mercedes-Benz continues to strengthen its luxury retail footprint across India, reflecting our ‘Go to Customer’ strategy. The inauguration of T&T Motors’ new facility in Lucknow marks yet another important milestone in bringing world-class luxury products, services and experiences closer to our customers. Uttar Pradesh remains an important emerging market for Mercedes-Benz, and the growing aspiration for luxury mobility in Lucknow presents strong growth potential for Mercedes-Benz. Through modern luxury infrastructure, personalised consultations, digital capabilities and EV readiness, we are elevating luxury retail experience for our discerning customers in the city.”

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Mumbai-headquartered automotive major Mahindra & Mahindra has unveiled its first global pick up christened Lifestyler, which will be launched in India as the Mahindra Scorpio Lifestyler. The vehicle will go on sale by April 2027 with prices starting below INR 1.97 million ex-showroom. 

First shown as a concept in Cape Town, South Africa, in August 2023, the pickup was designed at the Mahindra India Design Studio in Mumbai and developed at Mahindra Research Valley in Chennai. It is built on Mahindra’s next-generation body-on-frame architecture and is intended for both payload and lifestyle use. The company claims to have around 267 patents in terms of innovation for the Lifestyler.

Dr Velusamy R, President, Automotive Business, Mahindra & Mahindra, said, “From the outset, our vision was to create a world-class global pickup that raises the bar for the segment while remaining true to Mahindra's strengths in authentic capability and value. The Scorpio Lifestyler is a testament to the strong product development capabilities at Mahindra Research Valley (MRV). Built on our advanced next-generation body-on-frame architecture, it has been engineered to deliver the capability, durability, safety and refinement demanded by customers around the world.”

Pratap Bose, Chief Design and Creative Officer, Mahindra & Mahindra, said, “The Scorpio Lifestyler is inspired by how our customers work, play and explore. Combining bold exterior design, plush interiors and SUV-like comfort with unmistakable Mahindra toughness, it brings style and refinement to every journey. This philosophy is reflected in the three editions showcased today: Valley celebrates purposeful refinement, Reef embodies freedom and exploration, and Trail captures the spirit of boundless adventure. Together, they express our vision of a pickup that celebrates individuality while remaining rooted in capability, authenticity and the freedom to explore without limits.”

Nalinikanth Gollagunta, CEO, Automotive Division, Mahindra & Mahindra, said, “The Scorpio Lifestyler represents the convergence of global engineering and evolving customer aspirations. As we prepare for its India launch, we see a growing appetite among customers for a vehicle that delivers authentic capability without compromising on technology, safety, comfort or everyday usability. We are investing in building awareness, strengthening our network and creating the right ownership experience for this category. We believe the Scorpio Lifestyler has the potential to redefine expectations and shape the future of the pickup segment in India.”

While the technical details are still under the wraps, the company showcased three editions - the Valley Edition finished in Artemis Grey, the Reef Edition uses an Aquareef finish and the Trail Edition finished in Sahara Beige.

The Mahindra Lifestyler is aimed at the midsize lifestyle pickup segment in Australia and New Zealand, South Africa, Africa, the Middle East and Latin America. It has been developed to meet requirements for capability, durability, safety, technology and everyday use across those markets.

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Tata Motors Passenger Vehicles, one of the leading automakers in the country, is charting a confident course for FY2027. The company is sees its multi-powertrain leadership, capacity flexibility and industry-outperformance ambitions to drive a strong H2 for fiscal 2027.

Shailesh Chandra, Managing Director and CEO, of Tata Motors Passenger Vehicles, struck a distinctly forward-looking tone in the company’s Q1 FY27 virtual conference, outlining a strategy built on sustained demand for alternative-energy vehicles, flexible manufacturing, product intensity and disciplined capital allocation even as the broader industry navigates inflationary and commodity headwinds.

He characterised the remainder of FY2027 as a period of continued outperformance relative to the passenger-vehicle industry. Tata Motors at 14.1 percent had already delivered growth roughly twice the industry average of 7.9 percent in FY2026 and a robust 45 percent in Q1 FY2027 as against the industry average of 25.9 percent.

The management expects this momentum to persist. Industry volumes are projected in the mid-double-digit range of 15-20 percent for the remainder of the year in some scenarios.

Tata Motors, on the other hand, is targeting sustained growth even if overall industry expansion moderates to single digits in the second half because of a high base effect from strong H2 FY2026 demand.

Inventory levels are meaningfully lower than a year earlier, creating scope for healthier retail offtake. Q2 is expected to be more challenging for the industry as a whole due to cost pressures, with the second half potentially tighter still for conventional passenger vehicles.

Chandra, however, intends to defend and expand market share through timely product refreshes, facelifts and new nameplates across both ICE and electric portfolios, while prioritising supply-side capacity increases. Waiting periods across the Tata Motors range currently stand at 4-6 weeks, reflecting healthy demand.

Hatchbacks continue to contribute around 15-20 percent of the mix, while SUVs remain the structural growth engine. Export plans include opening a significant new market next year, with a dual focus on ICE and EV products; recent export growth has been driven primarily by South Africa.

Alternative Energy Mix

The shift toward alternative powertrains is central to Chandra’s vision. Industry EV penetration has reached approximately 8 percent – the highest among passenger-vehicle markets – and is expected to climb toward 10 percent by end-FY2027.

Tata Motors’ own EV share of its portfolio has risen from around 38 percent and is targeted at upwards of 40 percent (for the remainder of the year), supported by strong customer acceptance. EV demand has jumped sharply (management noted a 3-4 times increase relative to February levels for the company), but supply remains the binding constraint rather than underlying demand. Chandra revealed that the strong demand for EVs versus supply-side constraints has led to waiting periods for EVs of around 4-6 weeks.

CNG demand is robust: industry CNG share stands near 22 percent, while Tata Motors’ mix is higher at around 27 percent. The outlook remains positive as the CNG station network expands from roughly 8,500 to 15,000-16,000 stations in the coming year. CAFÉ norms (particularly CAFÉ 3 and CAFÉ 4) will further accelerate the push toward alternative-energy vehicles; for OEMs with credible EV offerings, electrification is the most powerful compliance lever.

Sharing his perspective on hybrid technology, Chandra stated that its share in the overall PV segment has stabilised at a modest 2-2.5 percent share. Tata Motors remains ready to introduce hybrids if market conditions warrant, but current emphasis is clearly on CNG and pure electric.

In Q1 the combined CNG-plus-electric mix rose from 19-21 percent to 24 percent. Management is optimistic that EV volumes for the company could grow 70 percent in FY2027, even allowing for some high-base effects in the second half, with overall company growth of 10-15 percent still feasible.

Capacity, Cost Pressures and Capital Plans

For Tata Motors internal EV capacity is not a bottleneck since production systems are fungible and flexible; capacity has already been stepped up from 9,000 to 13,000-14,000 units and reached more than 15,000 units last month, with further increases planned.

Responding to lower-than-anticipated sales for the popular Sierra SUV, the company attributed the temporary production impact to constraints from casting and sheet-metal suppliers plus a five-day production loss at the Sanand plant due to heavy rains, but corrective actions are under way.

Profitability in the recent period was pressured primarily by commodity-price inflation (approximately 4-4.5 percent impact) plus roughly 1 percent from other factors. Cost-reduction initiatives have partially offset these headwinds; in a normalised quarter, margins would have expanded more significantly. Certain PLI benefits were deferred because of new-product launches but will be reapplied in due course.

However, it is important to note that Chandra has emphasised that CAPEX plans remain unchanged at around 6-8 percent of revenue, which will continue to be directed toward new products, technologies and capacity expansion. Management sees no need to revise the programme despite margin pressure.

On the E20 contamination issue raised in the market, Tata Motors has not experienced customer reports and was not among the OEMs that submitted data on the matter.

Jaguar Land Rover Perspective

Richard Molyneux, CFO of JLR, noted that the luxury brand is a truly global business with only a small percentage of sales in India. China remains challenging, production of legacy products (including Jaguar) has been wound down, and a fire plus broader global slowdown affected Range Rover output. Q1 is seasonally soft for JLR, but the team is optimistic about sequential improvement. India is viewed as a significant growth market going forward, supported by existing domestic assembly and imports, with plans to expand the brand’s presence rapidly.

Chandra’s message is one of controlled confidence. Tata Motors Passenger Vehicles enters the balance of FY2027 with lower inventories, a flexible multi-powertrain portfolio that is already capturing rising CNG and EV demand, fungible capacity that can scale with the market, and an intact investment programme focused on product and technology. While the industry faces near-term cost and base-effect challenges, the company’s leadership in alternative energy, combined with ongoing product intensity and supply-side focus, positions it to continue outgrowing the market and to deepen its role in India’s evolving mobility landscape.

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