India’s automotive industry is navigating a challenging phase marked by rising commodity prices and growing uncertainty in global trade, according to Nirmal Minda, president, Assocham. This comes even as long-term demand fundamentals and the transition towards electric mobility continue to provide optimism for the sector, Minda told The Times of India.
Industry leaders say manufacturers and auto component suppliers are increasingly feeling the impact of higher raw material costs, particularly in key inputs such as plastics, aluminium and tungsten. The rise in commodity prices has added pressure across the supply chain at a time when companies are already dealing with margin constraints and evolving consumer preferences.
The sustained increase in input costs was becoming difficult for the industry to absorb entirely, Minda told ToI's Aabhas Sharma. According to him, automobile manufacturers and component makers are both facing elevated cost pressures, making price pass-throughs increasingly inevitable over time. He noted that while the current environment remains difficult, the situation is expected to stabilise gradually.
The comments come at a time when India’s automobile industry has been witnessing mixed trends. Passenger vehicle sales have remained relatively resilient, supported by strong demand for utility vehicles and premium models, while the two-wheeler segment has continued to recover steadily after facing pressure from inflation and weak rural demand in recent years. Industry analysts have pointed out that easing financing conditions and improving income levels are helping sustain consumer interest despite cost concerns.
Also read | Automakers' joy ride hits a big cost hurdle
Minda maintained that India still offers substantial long-term growth potential compared with mature global automobile markets. He cited rising per capita income levels and relatively low vehicle ownership rates as major structural advantages for the domestic auto industry.
Several industry reports have also highlighted that India remains one of the world’s fastest-growing large automobile markets, with demand expected to expand further as urbanisation and middle-class incomes rise.
The transition towards electric mobility is emerging as another major growth driver for the sector. Minda expressed confidence in the long-term prospects of electric vehicles but cautioned that charging infrastructure continues to remain inadequate, particularly outside large urban centres. Industry experts have repeatedly flagged infrastructure gaps as one of the key barriers to faster EV adoption across the country.
The two-wheeler electric vehicle segment, however, has shown faster momentum compared with passenger cars. Easier home-charging options and lower operating costs have contributed to stronger acceptance among urban consumers. Recent industry data has shown rising penetration of electric scooters and motorcycles, aided by government incentives and growing consumer awareness.
Minda said the Minda Group had started investing in EV technologies nearly five years ago and has since built capabilities across motors, motor controllers and chargers. Auto component companies are increasingly diversifying into EV-focused technologies as the industry gradually shifts away from conventional internal combustion engines.
At the same time, Minda underlined the importance of increasing localisation and strengthening research and development capabilities within India’s EV ecosystem. He stressed the need to reduce dependence on Chinese components and expensive European technologies, particularly in advanced electric vehicle systems.
Also read | MSME auto suppliers seek relief from carmakers as rising labour and input costs hurt
Industry bodies have consistently urged the government to expand incentives for domestic R&D and local manufacturing to strengthen India’s competitiveness in the global EV supply chain.
Beyond the automotive sector, Minda also raised concerns over the broader economic environment, especially the pressure on micro, small and medium enterprises amid global uncertainty. He said Assocham had sought temporary support measures, including interest subsidies, loan restructuring and quicker implementation of relief schemes to help MSMEs manage financial stress during the ongoing bout of volatility.
Industry leaders say manufacturers and auto component suppliers are increasingly feeling the impact of higher raw material costs, particularly in key inputs such as plastics, aluminium and tungsten. The rise in commodity prices has added pressure across the supply chain at a time when companies are already dealing with margin constraints and evolving consumer preferences.
The sustained increase in input costs was becoming difficult for the industry to absorb entirely, Minda told ToI's Aabhas Sharma. According to him, automobile manufacturers and component makers are both facing elevated cost pressures, making price pass-throughs increasingly inevitable over time. He noted that while the current environment remains difficult, the situation is expected to stabilise gradually.
The comments come at a time when India’s automobile industry has been witnessing mixed trends. Passenger vehicle sales have remained relatively resilient, supported by strong demand for utility vehicles and premium models, while the two-wheeler segment has continued to recover steadily after facing pressure from inflation and weak rural demand in recent years. Industry analysts have pointed out that easing financing conditions and improving income levels are helping sustain consumer interest despite cost concerns.
Also read | Automakers' joy ride hits a big cost hurdle
Minda maintained that India still offers substantial long-term growth potential compared with mature global automobile markets. He cited rising per capita income levels and relatively low vehicle ownership rates as major structural advantages for the domestic auto industry.
Several industry reports have also highlighted that India remains one of the world’s fastest-growing large automobile markets, with demand expected to expand further as urbanisation and middle-class incomes rise.
The transition towards electric mobility is emerging as another major growth driver for the sector. Minda expressed confidence in the long-term prospects of electric vehicles but cautioned that charging infrastructure continues to remain inadequate, particularly outside large urban centres. Industry experts have repeatedly flagged infrastructure gaps as one of the key barriers to faster EV adoption across the country.
The two-wheeler electric vehicle segment, however, has shown faster momentum compared with passenger cars. Easier home-charging options and lower operating costs have contributed to stronger acceptance among urban consumers. Recent industry data has shown rising penetration of electric scooters and motorcycles, aided by government incentives and growing consumer awareness.
Minda said the Minda Group had started investing in EV technologies nearly five years ago and has since built capabilities across motors, motor controllers and chargers. Auto component companies are increasingly diversifying into EV-focused technologies as the industry gradually shifts away from conventional internal combustion engines.
At the same time, Minda underlined the importance of increasing localisation and strengthening research and development capabilities within India’s EV ecosystem. He stressed the need to reduce dependence on Chinese components and expensive European technologies, particularly in advanced electric vehicle systems.
Also read | MSME auto suppliers seek relief from carmakers as rising labour and input costs hurt
Industry bodies have consistently urged the government to expand incentives for domestic R&D and local manufacturing to strengthen India’s competitiveness in the global EV supply chain.
Beyond the automotive sector, Minda also raised concerns over the broader economic environment, especially the pressure on micro, small and medium enterprises amid global uncertainty. He said Assocham had sought temporary support measures, including interest subsidies, loan restructuring and quicker implementation of relief schemes to help MSMEs manage financial stress during the ongoing bout of volatility.
