As 2025 draws to a close, India’s automotive ecosystem reflects a year marked by expansion into new markets, deeper engineering integration and rising demand for personalised, premium and sustainable mobility solutions. From coatings and materials to advanced vehicle design and mass-market OEM strategies, industry leaders highlight how efficiency, adaptability and customer-centric innovation shaped the year. In this year-end compilation, senior executives share their perspectives on growth drivers, evolving consumer expectations and the strategic priorities that will define the industry’s trajectory in 2026 and beyond.
Mr. Rajesh Menon, Director-General, SIAM: 2025 has been a landmark year for India’s automobile industry on multiple fronts. The year began on a strong note with the successful Bharat Mobility Global Expo, followed by the Government of India’s announcement of personal income tax reforms in the Union Budget, which helped lay the foundation for a positive demand environment.
FY2024–25 closed with robust performance across segments. Passenger vehicles and three-wheelers recorded their highest-ever sales, two-wheelers witnessed healthy growth, and the commercial vehicle segment maintained steady momentum. This performance was underpinned by a series of timely and supportive policy interventions that played a crucial role in sustaining demand and strengthening consumer confidence.
Monetary policy also provided a tailwind, with successive repo rate cuts by the Reserve Bank of India easing financing costs and improving sentiment. On the global front, the conclusion of the India–UK Free Trade Agreement in July marked a significant milestone, signalling India’s growing leadership in global trade and opening new opportunities for the domestic automotive industry.
While the industry faced certain supply-side challenges during the year, particularly due to the global shortage of rare earth magnets, it responded swiftly and effectively. A major positive development was the rollout of GST 2.0 reforms in September, which reduced GST rates on vehicles to 18 per cent and 40 per cent from earlier levels of 28–31 per cent and 43–50 per cent, respectively. These reforms significantly improved affordability, especially in entry-level segments, benefiting first-time buyers and middle-income households.
The continuation of the concessional 5 per cent GST rate on electric vehicles has further supported steady EV adoption across segments. Overall, all vehicle categories are expected to close the calendar year with growth over the previous year, alongside strong double-digit growth in exports—reflecting increasing global acceptance of vehicles manufactured in India.
With a favourable policy environment and improving geopolitical outlook, the Indian automobile industry remains optimistic that 2026 will witness sustained growth, as the country steadily progresses towards its vision of Viksit Bharat.
Toyota Kirloskar Motor spokesperson: “Overall, 2025 has been a positive year for Toyota, marked by stronger customer acceptance across our products and services, with year-on-year growth of over 17% [Jan–Nov]. We are grateful to the Government for the GST reforms, which have improved overall market affordability and enhanced purchasing power, thereby contributing to the sustained growth of the automotive industry.
This growth was supported by strong demand across our portfolio, with MPVs and SUVs remaining key drivers, resonating with customers who value reliability, comfort and versatility. At the same time, we witnessed a clear rise in demand for greener mobility solutions, reflecting increasing acceptance of our electrified offerings within India’s evolving mobility landscape. In addition, rural markets continued to gain momentum, with their growing openness to newer technologies, helping set the agenda for the year ahead.
As we look ahead, our commitment to decarbonization remains steadfast through Toyota’s multipath way approach, offering a broad range of technologies tailored to diverse customer needs and real-world usage. Anchored in our customer-first philosophy and long-term commitment to India, we will collaborate closely with all stakeholders to deliver world-class mobility solutions, advancing our global vision of carbon neutrality and mass happiness for all.”
Mr. Pratik Malkan, Chairman, Lusso Designs India: At Lusso Designs, transformation is approached as a structured, end-to-end process. Our capabilities span AI-led design modelling, robotics-assisted production, advanced prototyping and lightweight composite engineering, supported by strong process control and craftsmanship. This allows OEMs and mobility partners to enhance existing platforms, accelerate development cycles and deliver differentiated products that command premium positioning while aligning with sustainability objectives.
With India’s HNI and UHNI base continuing to expand, demand for bespoke and premium mobility solutions is expected to remain strong. Supported by global OEM collaborations and a focused R&D roadmap across luxury platforms, lifestyle vehicles and sustainable design concepts, Lusso Designs is well-positioned to support the industry’s next phase of growth through scalable, design-led and engineering-driven transformation.
Mr. Sharad Malhotra, Managing Director, Nippon Paint India: “2025 has been a year of expanding possibilities for us as we entered new product markets. As we look toward 2026, our focus remains on adding tangible value to our partners’ businesses. We anticipate a year where efficiency and adaptability will drive the market. We’re optimistic about the year ahead and confident in our ability to create lasting value for our stakeholders.”
As the industry moves forward, vehicle transformation is increasingly being driven by advanced engineering integration, intelligent systems and manufacturing-led innovation. Personalisation today has evolved from cosmetic differentiation to a core engineering principle, influencing vehicle architecture, material choices and feature integration across platforms.
