Almost half (46%) of the auto dealers surveyed are optimistic about further growth, while 43% expect sales to remain steady. However, 11% foresee a potential decline, signaling a somewhat cautious outlook. Many industry players are hopeful for stable or slightly increased sales in February, fueled by government policy support and a potential boost in consumer sentiment following the Union Budget.

According to FADA, all vehicle categories saw positive growth in January. Two-wheeler sales increased by 4.15%, driven by the wedding season demand, new model launches, and better financing options. The three-wheeler segment grew by 6.8%, and passenger vehicle sales recorded a notable 15.53% YoY rise.

In the commercial vehicle segment, sales expanded by 8.22%, supported by higher freight rates and strong passenger carrier demand. However, the sector still faces challenges, including sluggish activity in key industries such as cement, coal, and infrastructure, as well as stringent financing policies.

Tractor sales also showed resilience with a 5% increase YoY, particularly indicating consistent demand from rural areas. Notably, urban passenger vehicle sales increased slightly from 60.8% to 61.8%, while rural markets saw a stronger boost, up by 18.57% YoY compared to 13.72% in urban regions.

Looking ahead, FADA remains cautiously optimistic about February. While many dealers anticipate stable or rising sales, the industry’s path could be impacted by challenges such as rural financial constraints and weak demand in certain sectors. Nonetheless, government policies and seasonal demand could provide some much-needed support to the auto retail market in the coming months.

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The inclusion of cobalt, lithium, lead, zinc, and ion battery scrap in the import duty exemption is expected to reduce production costs for EVs, making them more affordable for consumers. Another significant factor in promoting EV growth is the expansion of domestic lithium-ion battery production. By increasing local production, India could reduce reliance on imports and lower EV costs.

While these steps should boost EV adoption, the industry’s practice of import parity pricing may negatively impact Indian miners of zinc and lead, as they will have to lower prices to remain competitive. Moody’s suggests that a state mining index will enhance transparency in pricing, benefiting miners.

Additionally, the government’s focus on recovering critical minerals from mining tailings is an innovative step toward reducing waste and addressing environmental concerns. However, mining companies may face higher capital expenditures for tailings management.

India’s passenger vehicle industry is forecast to grow at 4% in fiscal 2025-26, supported by economic recovery and increased consumer spending. While EV adoption remains a challenge, the momentum in the automotive sector is expected to continue, driven by the government’s supportive budgetary measures and increasing demand for cleaner vehicles.

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The rally kicks off with a flag-off at India Gate before heading to Ambience Greens, Golf Course, in Gurugram. With a growing global presence, the 21 Gun Salute has become a prominent fixture in the vintage motoring calendar. This year, the show will feature an exceptional lineup of 125 rare vintage cars and 50 heritage motorcycles, including revered marques like Rolls-Royce, Bentley, and Aston Martin. Notably, the exquisite 1939 Delahaye (Figoni et Falaschi) will be one of the main attractions, symbolizing timeless luxury and craftsmanship.

For the first time, three vintage cars—the 1932 Lancin Austura Pininfarina, 1936 AC 16/70 Sports Coupe, and 1948 Bentley Mark 6 Drophead Coupe—will make their debut at the event, adding to the excitement and allure.

Beyond the cars, the event will offer a cultural spectacle, with performances of Kathak, Bharatnatyam, Kathakali, and folk dances from regions like Rajasthan, Uttarakhand, and Haryana. This cultural immersion enhances the overall experience, making it a celebration of both automotive excellence and India’s rich heritage.

Madan Mohan, Founder and Managing Trustee of the 21 Gun Salute Heritage and Cultural Trust, expressed enthusiasm about the event’s growth, emphasizing its role in positioning India as a key destination for global heritage motoring tourism. “This year’s rally is organized on an unprecedented scale, bringing together rare and exquisite vintage cars and collectors from around the world,” Mohan said.

The event highlights Gurugram’s rising prominence as a hub for vintage car enthusiasts. With world-class infrastructure, a thriving automotive industry, and the presence of luxury car brands, the city is rapidly becoming the center of India’s vintage car culture. Mohan further added, “The 21 Gun Salute Concours d’Elegance enhances India’s global reputation for vintage car tourism, while showcasing the growing passion for classic automobiles in the country.”

As the event unfolds, Gurugram will become the epicenter of nostalgia, elegance, and automotive excellence, drawing enthusiasts from all corners of the world to celebrate vintage motoring history.

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A major step towards strengthening domestic manufacturing is the extension of full exemptions on 25 critical minerals, including cobalt and lithium-ion battery waste. This move is expected to lower input costs for manufacturers and foster growth in mining and processing industries. Additionally, the budget proposes exemptions on 35 capital goods used in EV and mobile battery production to reduce reliance on imports and enhance India’s position as a global battery hub.

Shailesh Chandra, President of SIAM, emphasized that the focus on clean tech manufacturing, including batteries and motors, will significantly benefit India’s growing EV ecosystem. Jyoti Malhotra from Volvo Car India echoed this, highlighting the government’s support for battery manufacturing, recycling, and charging infrastructure as key to driving EV adoption.

To further promote sustainable growth, the government introduced a National Manufacturing Mission for Clean Tech, targeting EV components, solar cells, wind turbines, and green hydrogen electrolyzers. This initiative aims to secure India’s place in the global clean energy market.

The Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme has also been extended to provide ongoing incentives, particularly for two-wheelers and commercial vehicles. Public-private partnerships will be encouraged to expand charging infrastructure and boost EV adoption.

In addition to boosting domestic manufacturing, the budget cuts import duties on premium motorcycles and cars, making high-end vehicles more affordable. Import duties on motorcycles above 1600cc and CBU cars have been reduced, attracting foreign investments in the luxury vehicle market.

The budget also introduced initiatives to foster electronics and semiconductor manufacturing, with a focus on enhancing domestic production of automotive electronics. Customs duty on interactive flat panel displays has been increased, while duty on LCD and LED TV open cells has been reduced to support local manufacturing.

Exports were another key focus, with an Export Promotion Mission aimed at integrating India’s manufacturing sector with global supply chains. This initiative will be supported by a Digital Public Infrastructure for International Trade and a framework for promoting Global Capability Centers (GCCs) in Tier-2 cities.

Dheeraj Hinduja from Ashok Leyland noted that continued investments in infrastructure and green mobility would fuel long-term economic growth. The budget’s focus on skilling, digitisation, and renewable energy ensures a holistic approach to India’s economic development.

In summary, the Union Budget 2025-26 lays a solid foundation for India’s automotive sector, prioritising EV adoption, clean technology, and manufacturing localisation. These measures, along with export growth and power sector reforms, will support a self-reliant and globally competitive automotive industry in the years to come.

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In a statement, Tarun Garg, Whole-time Director and COO of HMIL, highlighted the company’s ability to maintain sales momentum despite challenges faced by the industry. He attributed the success to customers’ trust in Hyundai’s smart mobility solutions.

One key factor driving growth was the introduction of the Hy-CNG Duo technology, which contributed to 13.1% of domestic sales in 2024, up from 10.4% the previous year. The Hyundai Creta, with 1,86,919 units sold, continued its dominance in the SUV segment, contributing 67.6% of HMIL’s domestic sales.

The company’s SUV portfolio remained a key strength, reinforcing Hyundai’s position as a leader in the segment. Exports also played a significant role, with 1,58,686 units shipped in 2024, underlining India’s role as a global export hub for Hyundai. Looking ahead, Garg expressed confidence that the upcoming Creta Electric would further boost Hyundai’s appeal in the SUV market.

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Tesla’s proposed strategy for India involves initially importing kits for assembly through the Completely Knocked Down (CKD) route, making the vehicles more affordable for Indian consumers. The price for Tesla’s upcoming EV is expected to be around INR 20 lakhs, significantly lower than their existing models. This move is a part of Tesla’s mission to make electric vehicles accessible to a broader audience in India.

Elon Musk recently met with Indian Prime Minister Narendra Modi, signaling a strong partnership between Tesla and the Indian government. This collaboration is expected to pave the way for Tesla’s operations in India, with plans to set up a manufacturing plant potentially in states like Gujarat, Maharashtra, or Tamil Nadu. The government is reportedly considering new policies to incentivize such investments, which would require Tesla to commit to sourcing components locally and possibly establishing a robust service and support network across the country.

Tesla’s initial entry might involve importing fully built units to test the market and gather data on how their EVs perform in Indian conditions. Over the next two years, Tesla aims to establish a full-fledged manufacturing plant, which would not only cater to the Indian market but also serve as an export hub for right-hand drive markets.

The Indian EV market, though currently small, is rapidly growing, with the government targeting a significant increase in EV adoption by 2030. Tesla’s entry is expected to accelerate this growth, introducing competition and innovation into the market, which is currently dominated by local players like Tata Motors.

These tweets underscore Elon Musk’s commitment to bringing Tesla to India and his recent interactions with the Indian government. Tesla’s entry is poised to be a game-changer for the Indian EV landscape, offering a mix of affordability and cutting-edge technology.

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