Weekly News Wrap: Magnet Shortage Hits Output And Launch Plans

Launch plans, market warnings, and policy shifts define a pivotal week for the auto industry.

By Darshan Nakhwa

10 Aug 2025

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Weekly News Wrap: Magnet Shortage Hits Output And Launch Plans

India’s auto sector witnessed a week of high activity, marked by fresh product plans, shifting competitive dynamics, uncertainty around rare earth supply, and notable policy developments.

Hero MotoCorp moved aggressively to defend its turf in the 125cc motorcycle segment and expand the Harley-Davidson lineup, while Bajaj Auto and Ather Energy scrambled to manage production challenges triggered by China’s rare earth magnet supply squeeze.

On the four-wheeler front, Hyundai unveiled an ambitious multi-year product roadmap–including potential entry of its luxury Genesis brand–while Maruti Suzuki’s chairman once again sounded the alarm on sluggish passenger vehicle sales. Tata Motors navigated multiple fronts from safeguarding EV production against critical mineral risks to stabilising its small commercial vehicle segment–while its JLR luxury arm remained firm on profitability targets despite tariff headwinds.

The policy environment also saw movement, with the extension of the PM E-Drive scheme, fresh discussions on tractor emission norms, and a push to curb Chinese imports in the construction equipment space. Meanwhile, the EV transition narrative stayed strong, led by record electric three-wheeler sales, NITI Aayog’s caution on adoption pace, and thought leadership on carbon monetisation and connected low-speed EVs.

Here’s the detailed round-up of all major developments this week:

Hero MotoCorp to Strengthen 125cc Portfolio With two Launches in Q2’FY26

Following the launch of the new CB125 Hornet by Honda in July, Hero MotoCorp is gearing up to launch two new products in the 125cc motorcycle category ahead of the peak festival season as India’s largest two-wheeler maker looks to fend off the competition from its rival–Honda Motorcycle and Scooter India.

This comes at a time when Honda overtook Hero in retail sales in India for the month of July. “In the deluxe 125cc segment, we are strategically poised to disrupt the market with the forthcoming launch of a new 125cc with best-in-class technology features and style, and a refreshed 4D 125cc variant. Both are designed to offer compelling value and enhance our competitive edge,” Hero MotoCorp’s management told investors.

Hero MotoCorp’s 125cc motorcycle portfolio currently consists of four models - Xtreme 125cc R, Glamour, Super Splendor XTec and Glamour XTech.

Hero Motocorp To Expand Harley-Davidson Lineup In Q2’FY26

Hero MotoCorp, which has a partnership with US-based premium motorcycle maker Harley-Davidson Motor to co-develop and manufacture motorcycles in India, plans to expand the Harley lineup with a new model on the 440 platform in the current July-September quarter.

“We are expanding the Harley lineup with new additions in this space, which will continue to excite the customers. There is a new product from the HD 440 portfolio, which you will see in the second quarter, and going forward, there will be exciting products that will come from the HD portfolio,” Hero MotoCorp’s management told investors.

Bajaj Auto Recalibrates New Chetak Launch Plans Amid Magnet Supply Issue

Bajaj Auto, which had earlier announced its plans to launch a new entry-level Chetak electric scooter in June, is recalibrating the launch of the model amid the shortage of rare earth magnet supply from China.

In May, the automaker said it is planning to launch a new model of Chetak electric scooter that will cater to the entry-level segment as part of the company’s broader strategy to strengthen its position in the rapidly growing electric mobility market. However, on Wednesday, Bajaj Auto’s Executive Director Rakesh Sharma said the company is focusing on restoring the production of existing models, which has been disrupted by the shortage of heavy rare earth magnet supply from China, before bringing new products.

Baja Auto had to reduce the production of its electric two-wheelers by as much as 50% in July and anticipates a similar production cut for August and September because of the heavy rare earth magnet supply crunch.

Bajaj Auto Sees 40-50% Cut in Q2 e2W Production Due to Magnet Shortage

The ongoing supply crisis for heavy rare earth magnets from China is impacting Bajaj Auto, which has already cut its electric two-wheeler production by as much as 50% in July. The company anticipates a similar production reduction for August and September, according to a senior company official.

“Our impairment of production started towards the end of June. In July, the production was affected to the extent of 50%. We were expecting the output to be zero in August, but it is not going to be so. August production will be better than July production, though we will still be at about 50-60% of the plan,” Bajaj Auto’s Executive Director Rakesh Sharma said.

Rare-earth magnets play a critical role in the automotive industry. These magnets are important, particularly for EVs, due to their higher performance in small form factors, enhanced energy efficiency and critical functionality in both powertrains and digital systems.

China produces 60% of the world’s rare earth elements and controls around 90% of the global refining capacity. China’s suspension of magnet supplies since April has put automakers on high alert, as they scramble to secure supplies and keep production running.

Ather Sees Magnet Shortage Impacting Dealer Supply for 7 days in Q2FY25

Electric two-wheeler maker Ather Energy has flagged a short-term disruption in vehicle supply to dealerships due to the shortage of rare earth magnets from China. The company foresees an impact of up to a seven-day supply to dealers during the July–September quarter of this financial year.

“In the short term, which is this quarter, there could be an impact of about a week odd in terms of potential business impact…The right way to see this would be not like a production stoppage for seven days, but a possible gap in our ability to supply our dealers' demand for up to about a week in this quarter,” CEO Tarun Mehta said on Monday.

He noted that the company is attempting to minimize retail disruption using channel inventory, though retail may still be partially affected due to limited stock buffers. “At this point, this will have some impact on retail. I would be amiss if I said this will have no impact on retail because our channel stocks are not that high. But there is channel stock and that is the advantage of having a channel.

As Entry-Level Sales Slide, Maruti Eyes Nexa and Arena SUV Launches to Regain Momentum

Even as the Indian passenger vehicle market heads towards its slowest growth since the Covid pandemic, Maruti Suzuki remains confident about its long-term prospects — projecting industry volumes to touch 6 million units by the end of the decade, up from the current 4.2–4.3 million. The company is banking on a sharper premium push through its Nexa brand, a stronger SUV play, and safety upgrades across its line-up to capture demand in a market where aspirations — and prices — are steadily climbing.

But the road ahead is not without challenges. Maruti’s market share has come under pressure as entry-level car sales shrink and rivals gallop ahead in the SUV segment. Even as Nexa celebrates 10 years and 3.2 million cumulative sales, industry watchers say it will need more high-ticket models to keep pace with an upward-shifting core market. Nexa has just added a limited-edition Grand Vitara to boost showroom appeal, while Arena is being primed for an all-new mid-size SUV aimed squarely at pulling share from rivals in the ₹10–20 lakh bracket.

Hyundai Motor India Evaluating Genesis Entry, Plans 26 New Models as It Enters ‘Next Chapter’: Tarun Garg

Hyundai Motor India Ltd (HMIL) is entering what Tarun Garg, Whole-Time Director and Chief Operating Officer, describes as its “next chapter” in the Indian market. This chapter is anchored by a multi-year product roadmap, capacity expansion, and potential entry into the premium segment with Genesis.

The company has plans to launch 26 new models by FY2029–30, including 6 battery electric vehicles (BEVs) and 20 internal combustion engine (ICE) vehicles. Further details of this rollout will be shared at Hyundai’s Investor Day in mid-October 2025. The expansion will be supported by its upcoming Talegaon plant, which is expected to become operational in FY2025–26. This plant will enhance manufacturing bandwidth across both ICE and EV segments.

“Together with India – Towards New Horizon, we are entering an exciting phase of growth,” said Garg in the company’s FY2024–25 annual report. “As we move forward, we remain committed to investing meaningfully in India’s mobility future, driving innovation, accessibility, and sustainable growth.”

Hyundai Bets on 6 Strategic Priorities to Regain Momentum in India’s Auto Market

Facing increasing competition and a recent dip in market share, Hyundai Motor India Ltd (HMIL) has laid a clear roadmap anchored on six strategic priorities to revive growth and reinforce its position in the world’s third-largest car market.

These priorities—detailed in the company’s FY2024–25 Annual Report—focus on product portfolio expansion, deeper localisation, electrification, calibrated capacity growth, premiumisation, and a stronger digital and export push.

The company acknowledges that macroeconomic uncertainties, global supply disruptions, and evolving consumer preferences have intensified competitive pressures.

At the same time, India’s changing policy environment—favourable repo rates, tax relief, and improving infrastructure—is beginning to create tailwinds for demand recovery.

Maruti’s RC Bhargava Again Flags Slowing PV Sales, Calls for Action

RC Bhargava, the Chairman of India’s largest passenger vehicle manufacturer Maruti Suzuki, has raised a red flag on the long-term health of the country’s passenger vehicle industry amid sluggish sales growth and called for government policies that can facilitate the growth of the car industry.

In the company’s annual report, Bhargava highlighted a concerning trend - the industry's average annual growth rate has stagnated at just 4.4% over the last six years. The situation worsened recently, with retail sales growth at a mere 3% in fiscal year 2025, and a subsequent decline of 1.3% in the first quarter of the current fiscal year.

“The growth rate of the car industry has become a matter of considerable concern,” he said. “This slowdown in the car industry has happened despite the country experiencing the highest GDP growth amongst large countries and calls for serious consideration.”

In the financial year 2025, domestic passenger vehicles grew by just 2% on year. Also, for the current financial year, the industry has projected sluggish growth in the range of 1-4% after recording 2% growth in FY25.

JLR Keeps 5-7% Margin Goal Amid Trade Headwinds, Demand Pressures

Tata Motors’ luxury arm Jaguar Land Rover (JLR) is holding its ground on profitability target despite a challenging first quarter hit by tariffs, new taxes, and a softening global demand environment. Group Chief Financial Officer P.B. Balaji, who will take over as JLR’s CEO in November, said the company remains confident of delivering its FY26 EBIT margin guidance of 5-7% and near-neutral free cash flows, even after a full-quarter blow from U.S. trade duties and fresh levies in China.

“In the quarter, we got hit by almost 250 million pounds on tariff charges…a full impact of 27.5% that you see,” Balaji said during a media call on Friday, referring to the tariffs on UK- and EU-produced cars exported to the U.S. “Even though the deal was announced on May 8, it got ratified only on 30 June, and it is not with retrospective effect… That’s the reason why the EBIT also went down to 4% in JLR.”

Tata Motors: Bottoming Out in Small Commercial Vehicles?

Tata Motors, anticipates a potential turnaround in its small commercial vehicle (SCV) segment, a division that has experienced a prolonged period of decline. According to PB Balaji, Group CFO of Tata Motors, the segment's performance appears to have "flattened out," with expectations for an upward trajectory in the coming quarters.

The Mumbai-based manufacturer currently holds a domestic commercial vehicle (CV) VAHAN market share of 36.1% in Q1 FY26. Within its broader commercial vehicle portfolio, Tata Motors commands 47.7% in Heavy Goods Vehicles and Heavy & Medium Vehicles. Its market share in Medium Goods Vehicles stands at 35.9%, while Light Goods Vehicles account for 28.9%. In the passenger category, the company holds 36.9% of the market.

Tata Motors Looks to Rare Earth Alternatives to Safeguard EV Production

India’s largest EV carmaker Tata Motors is proactively de-risking its electric vehicle supply chain as rare earth magnets, critical for EV motors, emerge as the next big global bottleneck. While production remains unaffected for now, Group CFO P.B. Balaji confirmed that both Tata Motors and JLR are moving quickly to avoid future disruptions.

“I think all options on the table, including redesigning, including lighter ones, including different sources, including different substitutes being put in place. The learnings coming from the semiconductor crisis has meant that we have been off the blocks quite fast. And that has helped us cope with this quite well, both here (at Tata Motors) and in JLR. And that is what we are executing,” Balaji said during the Q1 FY26 earnings call.

For now, Tata Motors says it is not flagging any disruption in production or launch timelines. But with global tensions escalating over critical mineral supply chains—driven in part by China’s dominance—Balaji made it clear the company isn’t taking any chances.

Escorts Kubota Bets on New Launches, Regional Strategy to Regain Market Share

Escorts Kubota Ltd. (EKL) is banking on a robust product pipeline and targeted regional strategies to strengthen its market position, even as the company navigates structural industry shifts that have temporarily dented its share.

The company’s recent launches under its Promaxx and Powertrac brands are showing early signs of success in select markets. “Promaxx phase one is doing well, and in the states where it has been introduced, Farmtrac’s market share has grown,” said Neeraj Mehra, Chief Officer, Tractor Business Division, Escorts Kubota Ltd. “Although the growth is marginal and it’s still early days, we are seeing positive trends.”

In the agri-machinery segment, EKL sold 30,581 tractors, registering a modest 0.7% on-year growth. Segment revenue rose 0.4% to Rs 2,181.5 crore, with EBIT margin improving to 12.6%.

JCB India Sees Global Opportunities Amid US Export Tariffs

India’s largest construction equipment maker, JCB, is bracing for the impact of new US tariffs on its exports, but remains confident of weathering the short-term disruption by diversifying markets, leveraging UK-India free trade agreement, and riding on its new CEV V-compliant machines.

“The US is a big market. Last year, we exported almost 10,000 machines from India as JCB, and the industry as a whole shipped 12,000–13,000 units. The tariff will have an impact, but I believe these are short-term challenges,” said Deepak Shetty, CEO and Managing Director, JCB India.

The US has imposed an additional 25% tariff on Indian exports including the automotive industry including construction equipment categories, though the exact impact depends on product-specific HSN codes. Shetty cautioned against “reacting in a negative way” and noted that JCB’s global footprint with exports to 135 countries and manufacturing in India, the UK, Brazil and the US, offers flexibility to re-route supplies and tap alternate markets.

Bosch India's Sensor Dispute with Expensive Consequences

Bosch India has been ordered to pay over Rs 140 crore in duty differentiation and penalty by the Customs department over the alleged misclassification of oxygen sensors. The development comes over a month after another penalty received by the company, to the tune of Rs 96 crore, over the alleged misclassification of ECUs and NOx oxygen sensors.

Automotive firms know a thing or two about systems working in harmony. Engines, electronics, sensors, and software: all must operate with precision. But when it comes to India's customs machinery, harmony often gives way to interpretation.

On Thursday, Bosch Ltd. disclosed in a regulatory filing that it had received a fresh order from the Principal Commissioner of Customs (Import) at New Delhi’s Air Cargo Complex. The dispute? A matter of classification—specifically, how imported oxygen sensors should be coded under the Customs Tariff Act. The customs authority has concluded that Bosch misclassified the parts and owes Rs 70.41 crore in differential duty. To make matters worse, an equivalent sum—Rs 70.45 crore—has been added in interest and penalty, taking the total liability to a staggering Rs 140.86 crore (plus further interest).

Sona Comstar to Begin with Differential Housing Supplies Under China JV, Advances Sensor Tech with Novelic

Sona BLW Precision Forgings Ltd. (Sona Comstar) is set to begin operations under its new joint venture in China by supplying differential housings and other driveline components, as part of a phased strategy to deepen its presence in the world’s largest electric vehicle (EV) market. The move is part of the company’s broader push into Asia and a key step in its long-term global expansion roadmap.

“We will not manufacture differential gears in China. That’s pretty certain,” said Vivek Vikram Singh, Managing Director and Group CEO of Sona Comstar. “What we’ll start off with is supplying differential housing and other parts from India. In the next phase, which is not yet part of the financial plan, we may export gears for final assembly there.”

Uno Minda Seeks to Buy Out German Partner Buehler Motor GmbH from EV Traction Motor JV

Uno Minda Limited plans to buy out its German partner, Buehler Motor GmbH, from their joint venture, Uno Minda Buehler Motor Private Limited, which manufactures traction motors for electric two- and three-wheelers, the company disclosed while seeking in-principal approval for the proposed acquisition.

Uno Minda Buehler Motor Private Limited, the target entity, is engaged in the manufacturing and production of traction motors for battery-powered electric two-wheelers and three-wheelers. The company specializes in electronically commutated DC motors and also deals with related machinery, engines, plants, and production equipment. Incorporated in December 2022, the company operates exclusively in India.

TMA Recommends Excluding 25–50 HP Tractors From TREM V Emission Norms

In a move designed to promote regulatory consistency and reduce emissions, the Tractor and Mechanization Association (TMA) has recommended that new emission standards for tractors specifically exempt models ranging from 25 to 50 horsepower (HP).

Bharat Madan, Whole Time Director and Chief Financial Officer, Escorts Kubota Ltd. (EKL) who also chairs the Finance Committee at TMA, told Autocar Professional that the proposed recommendation is likely to be accepted by the government.

Government to Regulate Construction Equipment Imports from China: Gadkari

The government is working on new regulations for the construction equipment sector that will reduce the import of construction equipment from China, according to Minister of Road, Transport and Highways Nitin Gadkari.

"We will introduce new rule and regulation [for construction equipment] in the next parliament session. Once it is passed, there will be standards, and industry won't face any problems [related to Chinese imports], Gadkari said, while speaking at the annual session of Indian Construction Equipment Manufacturers' Association (ICEMA) on Thursday.

India is the third-largest construction equipment market in the word, valued at around $9-10 billion. The industry is anticipating robust growth over the next few years and aims to become second largest market by 2030.

PM E-Drive Scheme Extended till FY28 end; e2Ws, e3Ws Subsidies to End in FY26 end

The government has extended the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme by two years, until March 2028, according to a notification from the Ministry of Heavy Industries. However, the subsidies on electric two-wheelers and three-wheelers will be terminated by March 31, 2026.

The Rs 10,900-crore scheme, which provides incentives on the purchase of electric vehicles and setting up charging infrastructure, was launched on October 1, 2024, and was initially supposed to expire on March 31, 2026. The recent notification extended the expiry date of the scheme to March 31, 2028.

PM E-Drive scheme comes with a target of providing demand incentives worth Rs 3,679 crore on the purchase of electric two-wheelers, three-wheelers, ambulances and trucks, while Rs 7,171 crore has been set aside to boost the adoption of electric buses, improve public charging infrastructure and upgrade testing infrastructure. The target is to support 24.79 lakh electric two-wheelers, 3.16 lakh three-wheelers and 14,028 buses and trucks, as well as 88,500 electric vehicle charging sites.

NITI Aayog Flags India’s Slower Pace of EV Adoption

India has a goal to achieve 30% electric vehicle (EV) penetration by 2030 as part of its vision to become a global hub for EVs. However, the government’s think tank NITI Aayog has flagged that the country currently lags behind global EV adoption rates and underscored the need for renewed strategies and policy interventions to accelerate progress toward the target.

"India's EV sales have recorded impressive growth from a modest 50,000 units in 2016 to about 2.18 million in 2024, which is about 20% CAGR growth. However, we also have to acknowledge the fact that the adoption of EVs in India is at a slower pace than not only China, but also the EU and the US. The global penetration is about 17% now, whereas we are at a little under 8%," said NITI Aayog Member Rajiv Gauba

Indian Tyre Companies Reposition as US Inflation Looms and Tariff Barriers Rise

India's leading tyre manufacturers are navigating a turbulent global trade landscape, with mounting US tariffs forcing them to recalibrate their export strategies and manufacturing footprints. While the domestic market remains a robust anchor, companies like JK Tyre , CEAT and Apollo Tyres are deftly shifting volumes and assessing long-term investments to mitigate the impact of rising protectionism, particularly from the critical North American market.

The development comes even as the POTUS Donald Trump this week added another 25% punitive levy on Indian imports, over its trade with Russia.. This takes the total tariff to 50% on Indian imports by the US, which makes it among the highest in the world.

The move, as per industry stakeholders, is expected to affect Indian exports of auto components and tyres, especially to the US, which accounts for 27% of India's auto component exports and 17% of its tyre exports.

Why India’s EV Future Depends on Monetising Emissions Through a Digitally Integrated Carbon Market

In an ideal world, individuals and businesses would embrace sustainable choices like electric vehicles (EVs) simply because it's the right thing to do for the planet. In the real world however, decisions are shaped by economics—by the need to reduce the cost of change and maximise its benefits.

Early adopters of EVs often face higher upfront costs and uncertainty about long-term savings, despite the clear environmental gains. To bridge this gap, India needs to urgently build a digital, integrated carbon market—one that allows EV users and other green adopters to monetise the carbon savings they generate. By turning emissions reductions into tangible financial value, we can create a powerful incentive that accelerates the transition to cleaner technologies while rewarding those leading the way.

From Smart Scooters to Smart Cities: Why Connected Low-Speed EVs Are a Game Changer

In India’s rapidly urbanizing landscape, low-speed electric vehicles (LSEVs) are redefining how people move in cities. Originally seen as a simple and affordable mobility option, LSEVs are now evolving into smart, connected vehicles playing a critical role in last-mile connectivity, green logistics, and even urban planning.

These vehicles are lightweight, inexpensive, and exempt from license and registration requirements. That makes them especially appealing to students, senior citizens, gig workers, and cost-conscious commuters. But what’s more significant is how these so-called “slow” scooters are driving a much faster transformation in the way India moves, plans, and powers its cities.

Electric 3Ws continue to eat into CNG market share, set for record sales in 2025

The march of the electric three-wheeler industry, which continues to see the highest level of transition from ICE to zero-emission mobility, is reflected in the July 2025 retail sales numbers. With 69,145 units and 9% YoY growth (July 2024: 63,674 units), India e-3W Inc has registered its best-ever monthly sales yet, beating the previous best of 66,014 units in May 2025. What’s more, the fuel-wise sales numbers reveal that the e-3W industry continues to eat into the share of their CNG-powered cousins.

Review: Tata Motors powers up Harrier appeal with new electric variant

Tata Motors, which has recently launched the Tata Harrier EV, the all-electric version of its rugged, full-size, monocoque SUV, aims to widen the appeal of this proven product that was first introduced in India in CY2019.

Since the Tata Harrier’s rollout, Tata Motors has clocked total wholesales of 142,608 units till end-June 2025, and had also lent a midlife makeover to the diesel-only Harrier in CY2023. While a market transition towards petrol SUVs has seen the Harrier’s sales down for two consecutive fiscals, the company has been quicker to adapt to the electrification trend by introducing the Harrier EV.

Launched on June 27 with prices ranging from Rs 21.49 lakh to Rs 28.99 lakh, ex-showroom, the Harrier EV aims to widen the appeal of Tata’s rugged SUV to a wider audience which is now seeking cleaner propulsion options due to growing governmental restrictions dissuading buyers from opting for diesel-powered vehicles.