GlobalData’s latest market forecasts illustrate the mixed picture ahead in terms of light vehicle sales by major world region. There’s an ongoing price war in China as well as the spectre of trade protectionism and geopolitical issues impacting the sales outlook elsewhere. Nevertheless, there are significant opportunities, or at least potential opportunities, out there. We highlight major market trends and opportunities in India’s automotive sector.
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India, a market and production hub that is (finally) showing its potential
India has long been viewed as an automotive market with huge demand potential, given its vast population and forecasts for economic growth that will bring higher per capita incomes for motorisation in its major conurbations and their regional hinterlands. The Indian Light Vehicle (LV) market set a new record for the third consecutive year in 2024 after having been impacted by the pandemic in 2020-21. Demonstrating resilience in the face of numerous headwinds, including elevated interest rates, a depreciating rupee that contributed to higher vehicle prices, extreme weather conditions such as heatwaves and uneven monsoons, and elections at both the central and state levels, the market remained robust.
After last year’s record sales, the Indian market is off to a strong start in the New Year. The January selling rate surged to an all-time high of 5.39 million units a year, up nearly 10% from a solid December. In YoY terms, sales (i.e., wholesales) increased by 3% in January despite a high base.
Passenger Vehicle (PV) wholesales rebounded in January following the destocking exercise at the end of 2024, with each of the top five automakers posting improved figures. The most significant MoM growth were observed by Suzuki Group, Hyundai, and Mahindra. According to the Federation of Automobile Dealers Associations (FADA), PV Inventory levels dropped by around five days to 50-55 days in January, compared to 55 and 60 days at the end of December 2024 and a peak of 80-85 days in September. Aggressive discounts and incentives at the end of 2024 helped clear stocks as well. On the retail side, PV sales expanded by a hefty 59% MoM in January, but FADA cautioned that “some of that spike stems from December purchases registered in January for a “2025 model year” advantage.”
There’s a clear market focus on sub-compact cars and also on SUVs.
In January, the new generations of the Maruti-Suzuki Swift and Dzire as well as the Honda Amaze (all of which are Sub-Compact Cars launched in 2024) continued to sell well. At the Bharat Mobility Global Expo 2025, the major new launches were SUVs, with a particular emphasis on BEVs. The biggest highlights included the Hyundai Creta BEV (which was launched at the Expo) and the forthcoming Suzuki e Vitara. Additionally, the Skoda Kylaq and the Kia Syros SUVs have made their market debut. These new models and model updates are expected to support sales this year.
A primary driver of India’s market has been strong demand for SUVs, particularly newer and higher-end models, which often had extended waiting periods. In contrast, sales of less expensive entry-level models and older SUVs lagged, as their potential buyers increasingly opted for more affordable used vehicles.
Another positive factor for vehicle sales this year comes from government policy. The recently announced 2025-2026 Union Budget included income tax reductions for the middle class, which could potentially encourage undecided vehicle buyers to proceed with their purchase decisions in the coming months. The budget also included measures to boost the EV industry, such as the exemption of import duties on capital goods crucial to manufacturing EV batteries. On the monetary front, the Reserve Bank of India, under the new governor, has cut its benchmark interest rate for the first time in almost five years (from 6.5% to 6.25%), despite the fact that a record-low rupee is fuelling inflationary pressures. The bank’s concern has clearly shifted from inflation to economic growth, as the economy continued to slow through to Q3 2024. Further rate cuts are possible and would help consumer spending.
Let’s not forget electric vehicles though. It’s an area that looks ripe for growth from current low volumes. India recorded nearly 100,000 EV sales last year, while China achieved 11 million.
OEMs are rapidly evaluating their strategies for India’s vehicle market.
For example, Tesla has identified sites for showrooms in New Delhi and Mumbai, marking progress in its strategy to enter India’s automotive market. Local automakers have resisted Tesla’s entry, fearing it could impact their EV plans. Despite ongoing discussions, Tesla hesitated due to high import duties. Recently, India reduced its basic customs duty on vehicles priced above $40,000 from 110% to 70%. US President Donald Trump recently highlighted India’s high car duties but agreed with Modi to pursue an early trade deal to resolve tariff issues.
Although India’s EV sector is smaller than China’s, it offers Tesla an opportunity.
An analysis of GlobalData’s Job Analytics Database reveals that Tesla has posted around 15 jobs in February 2025 across Mumbai and Pune, reflecting its commitment to building a strong sales, service, and support network in India.
Tesla’s hiring strategy in India is aimed at driving growth and increasing brand presence in the market. The company is focusing on building a strong service infrastructure, improving customer engagement, and expanding its market share through targeted marketing strategies.
Sherla Sriprada, Business Fundamentals Analyst at GlobalData, comments: “These job postings indicate a focus on areas such as charging, engineering & information technology, vehicle service, sales & customer support, operations & business support, among others. This also indicates plans for possibly more hires and setting up new EV market team in India.”
India will also become an increasingly important market and production location.
Suzuki (Maruti – market leader) is targeting a local market share of 50%, while also planning to strengthen its vehicle export operations in the country. By FY2030, it aims to have an overall production capacity of four million vehicles a year in India.
Suzuki has said it aims to launch four new BEV models in Europe by FY2030, starting with a battery-powered Vitara, with India expected to be the main source of overall vehicles sold in this region.
Suzuki India has also just introduced its first battery electric vehicle (BEV), the Maruti Suzuki e Vitara, marking the company’s official foray into the electric vehicle market. Maruti Suzuki plans to commence production of e VITARA vehicle at its Gujarat facility in India in spring 2025.
VinFast, the Vietnamese EV maker listed on the Nasdaq, has also officially entered the Indian automotive market with the launch of two all-electric SUVs, the VF 6 and VF 7, at the Bharat Mobility Global Expo 2025.
The company said it has developed right-hand drive versions for the VF 6 and VF 7 SUVs specifically for this market. These are the firm’s first models to be launched in India.
Kia Corporation has announced that it has begun mass production of its newly-developed Kia Syros small SUV in India, following the model’s official global unveiling earlier this year.
Kia India held a ‘milestone ceremony’ at its plant in Anantapur, in the Indian state of Andhra Pradesh, to mark the beginning of Syros production – an event attended by Kia Corporation’s CEO Ho Sung Song (a sure sign of India’s growing strategic importance) and Kia India’s managing director Gwanggu Lee.
While many are drawn to India’s major cities for sales, it is essential not to overlook the less obvious smaller cities and their demand potential. One illustrative example: Mercedes-Benz. The premium brand is set to broaden its reach in India by opening an additional 20 dealerships or service outlets in 2025, focusing on smaller cities. Mercedes-Benz which currently operates 125 outlets in India, is shifting its focus from metropolitan hubs like New Delhi and Mumbai to towns where demand for high-end and electric vehicles surpasses that for entry-level models.
In Indian cities such as Kanpur and Patna, Mercedes has observed a higher demand for its premium and electric vehicles. Mercedes intends to establish service centres in these areas as an initial step towards expansion. Last year, the company’s sales in the country exceeded 19,500 vehicles, which was a 12% increase from the previous year. Mercedes says it has seen stronger EV sales in smaller cities, where stand-alone homes offer more charging space than blocks of apartments.
Hyundai is developing a sub-Tucson model especially for India. Due to be revealed in late 2026 and on sale in mid-2027, production of the Ni1i project will take place at the former General Motors Talagaon plant outside Pune. Insiders report that there will be up to seven seats, with powertrain choices including a hybrid option.
Light vehicle output in India is forecast by GlobalData at around 5.9 million units in 2025, rising to 7.2 million units by 2030. Suzuki, Mahindra, Tata Motors and Hyundai dominated the country’s vehicle manufacturing volume in 2024 (below chart), but other OEMs will also undoubtedly look at India’s demand potential and low manufacturing costs as presenting very significant opportunities in the years to 2030.
