India's automotive industry saw another eventful week between October 5 and 11, with the outlook for vehicle demand, electrification, corporate deals and fresh manufacturing investments dominating developments.
The Reserve Bank of India's first rate hike in nearly four years came just as the auto industry prepares to compare sales against the strong GST 2.0-led festive surge of last year. Meanwhile, electric two-wheeler retail hit a fresh monthly record, Hyundai and TVS Motor moved ahead with their jointly developed electric three-wheeler, and Ola Electric finalised the terms of its ₹1,000 crore rights issue.
Corporate activity was also strong. Tata Motors raised its offer for Iveco, Forvia and Gabriel India formed a seating joint venture, TVS Automobile Solutions raised ₹425 crore, while Tata Electronics, Federal-Mogul Goetze, GoldSeal-SaarGummi and other suppliers moved ahead with fresh capacity and technology investments.
Market and Demand
RBI Rate Hike Adds to Auto Growth Test
The RBI raised the repo rate by 25 basis points to 5.50%, adding a fresh affordability concern for the auto industry. The immediate impact on vehicle EMIs is relatively small, but the hike comes as the sector starts comparing sales with last year's GST 2.0-led surge and as higher commodity and logistics costs push vehicle prices up.
September vehicle registrations rose 31.82% year-on-year to 25,36,920 units, but FADA described it as the year's most base-distorted growth print. From October, comparisons become tougher because pent-up demand and lower GST rates had driven a sharp sales increase a year earlier.
Auto Retail Hits Record H1, but Inventory Risk Rises
India's vehicle retail market recorded its strongest first half, with registrations rising 20.77% to 1.55 crore units in H1 FY27. September registrations alone increased 31.82%.
FADA, however, expects full-year growth to settle at around 8-12% as the industry begins lapping the high post-GST base. Passenger vehicle stocks also climbed to 43-45 days, more than double FADA's preferred inventory benchmark of around 21 days, raising the possibility of a post-festive stock build-up if retail demand slows.
Electric Mobility
Electric Two-Wheelers Hit New Monthly Record
India's electric two-wheeler market reached a new high of 2,07,850 retail units in September, up 89% year-on-year. H1 FY27 volumes jumped 76% to 11,24,072 units, the first time the segment has crossed one million units in the first half of a fiscal year.
TVS Motor led the market with 2,90,001 units in H1, followed by Bajaj Auto at 2,53,521 units and Ather Energy at 1,79,661 units. Ola Electric, which had previously led the market, recorded 85,645 units, down 23% year-on-year.
Hyundai-TVS Electric Three-Wheeler Targets 2027-28 Launch
Hyundai Motor Company and TVS Motor are working towards a late-2027 or early-2028 launch for their jointly developed electric three-wheeler, internally called U834.
Two versions are planned, with combined production of around 3,000-4,000 units a month, or an annualised 36,000-48,000 units. Hyundai is leading design, while the vehicle is being co-engineered with TVS and is expected to be manufactured at TVS Motor's Hosur facility. India will be the first market.
EV Insurance Claims Cost More Than ICE Cars
Policybazaar data showed that average insurance claim severity for electric cars is around 14% higher than for comparable ICE vehicles, at ₹41,543 versus ₹36,185.
The comparison covered vehicles in their first three years and in the ₹10-15 lakh price range. Policybazaar attributed the difference to batteries, electronics, imported components and a less-developed EV repair ecosystem. Battery protection cover adoption among EV owners has increased from 51% to 70% over the past six months.
Ola Electric Finalises ₹1,000 Crore Rights Issue
Ola Electric approved a ₹999.74 crore rights issue involving 37.03 crore partly paid-up shares at ₹27 each. Existing investors will be entitled to two shares for every 25 shares held, with the issue opening on October 22.
Founder Bhavish Aggarwal will participate in the issue and earlier in the week pledged 20 crore Ola Electric shares, representing 4.32% of the company, to finance his participation. The fresh pledge is larger than the 17.3 crore shares pledged at the previous peak in 2025.
Euler Builds 25% Share in Electric Cargo LCVs
Euler Motors said it has captured around 25% of India's four-wheeler electric cargo LCV market, while overall EV penetration in the segment has increased from about 1% to 5%.
The company has sold around 6,500 units of the Storm EV and Turbo EV 1000, with monthly volumes increasing from about 50 vehicles in early 2025 to nearly 1,000 by September 2026.
UP Approves 1,725 Electric Buses
The Uttar Pradesh Cabinet approved deployment of 1,725 air-conditioned electric buses across 18 cities under a 12-year gross-cost-contract model.
Private operators will procure the buses, install charging infrastructure and run the fleets, while the state will provide subsidies of up to ₹40 lakh per 12-metre bus and ₹35 lakh for nine-metre models.
Passenger Vehicles and Two-Wheelers
Mercedes Says Demand Is Running Ahead of Supply
Mercedes-Benz India sold 15,190 vehicles in January-September 2026, its highest-ever volume for the period and an increase of 8% year-on-year. Managing Director and CEO Santosh Iyer said inadequate supply prevented the company from posting double-digit growth.
The company expects EVs to account for 20-25% of sales next year if supply improves. It has more than 1,000 pending orders for the CLA BEV.
Mercedes also received more than 650 expressions of interest within 36 hours for its locally manufactured Electric GLC ahead of its November 4 launch.
Triumph Takes Bonneville Into 350cc Market
Triumph Motorcycles extended the Bonneville name into India's high-volume 350cc market with the new T40, priced at ₹2.80 lakh.
The motorcycle takes Triumph directly into a segment dominated by the Royal Enfield Classic 350 and also competes with the Honda CB350 and Jawa 350. India's >250cc to 350cc segment sold nearly 10.95 lakh motorcycles in FY26, with Royal Enfield accounting for around 93.5% of the market.
JSW Motors Signals December Announcement
JSW Motors has called stakeholders for an event scheduled for December 3-4, describing it as an important step forward for the company and signalling a possible new product or business announcement. The company has not yet disclosed what will be unveiled.
Corporate Deals and Funding
Tata Motors Raises Iveco Offer to €3.91 Billion
Tata Motors increased its offer for Iveco Group by €0.30 to €14.40 per share, raising the value of the proposed transaction to €3.91 billion. The company cited delays in obtaining regulatory authorisations and said the revised price is its best and final offer. The transaction covers Iveco excluding its defence operations.
Mahindra Aerospace Arm Brings Embraer in as Majority Partner
Brazilian aircraft manufacturer Embraer will acquire a 51% stake in Novavayu Aerospace, a recently incorporated step-down subsidiary of Mahindra & Mahindra. The transaction is expected to be completed by December 1. Following the deal, Novavayu will cease to be a wholly owned subsidiary and become an associate of Mahindra Defence Systems.
TVS Automobile Solutions Raises ₹425 Crore
TVS Automobile Solutions, which operates the myTVS aftermarket platform, raised ₹425 crore in a Series D round led by CE-Invests, according to a news report. The funds will support domestic technology and AI investments and expansion into the Middle East and North Africa. The company reached EBITDA breakeven in FY26 and is building scale ahead of a planned public listing.
Motherson Raises ₹200 Crore Through Commercial Paper
Samvardhana Motherson International issued ₹200 crore of 83-day commercial paper to Kotak Mahindra Bank at a coupon of 6.25%. The unsecured paper is due to mature on December 22.
Components, Manufacturing and Technology
Forvia-Gabriel Seating JV Targets 10% India Share
Forvia signed a joint venture agreement with Gabriel India to expand its automotive seating business in India. Forvia will own 50% plus one share, while Gabriel India will hold the balance. The venture, Faurecia Anand Seating India, will manufacture seat frames and complete seats and aims to give Forvia around 10% of India's seating market within five years. The deal is expected to close by the end of 2026.
Tata Electronics Starts Assam Semiconductor Pilot
Tata Electronics began pilot activity at its ₹27,000 crore semiconductor assembly and test plant at Jagiroad in Assam. The OSAT facility is designed for capacity of up to 48 million semiconductor units a day and will serve automotive, communications, IoT and AI applications. Qualcomm automotive modules are among the products planned for the site.
Federal-Mogul Goetze Approves ₹335 Crore Expansion
Federal-Mogul Goetze India's board approved ₹335.1 crore of capacity expansion across Bahadurgarh-Patiala, Yelahanka-Bengaluru and Bhiwadi. The additions, funded through internal accruals and scheduled over 18 months, will expand production of products including piston rings, pistons and engine-valve components.
GoldSeal-SaarGummi Invests Over ₹54 Crore
GoldSeal-SaarGummi India is investing more than ₹54 crore as it expands beyond traditional EPDM rubber products into thermoplastic and higher-value vehicle sealing systems. A new ₹22 crore Chennai plant marks its entry into thermoplastics, while more than ₹32 crore is being invested at Daman. The company is also upgrading its Sanand operation for new Hyundai programmes.
Tsuyo Wins $3.2 Million Annual Electric Motor Order
Tsuyo Manufacturing secured an annual order worth approximately $3.2 million from an Indian OEM for interior permanent magnet motors used in electric three-wheelers. The programme is expected to run for 10 years. Tsuyo said the motor is free of heavy rare-earth materials and offers system efficiency of up to 93%.
ARAI, COEP Plan ₹105 Crore Ergonomics Research Centre
ARAI and COEP Technological University will establish an Advanced Ergonomics and Human Factors Research Centre in Pune with planned investment of ₹105 crore. The 38,000 sq ft facility is intended to develop testing methods, engineering standards and validation systems based more closely on Indian physical characteristics rather than relying primarily on European ergonomics data.
Endurance Buys Italian Die-Casting Company
Endurance Technologies acquired 100% of Italian aluminium component maker Fondalpress for €12.34 million through its European subsidiary. The transaction expands Endurance's aluminium die-casting and machining capacity in Europe and gives it additional manufacturing infrastructure and customer reach.
RPG Evaluates New Tyre Plant in Madhya Pradesh
RPG Group is exploring a new greenfield tyre factory in Madhya Pradesh, adding to its existing manufacturing presence in Jabalpur. Investment and capacity have not yet been finalised.
JM Frictech also announced an investment of around ₹50 crore in a fourth manufacturing facility in Chandigarh, which is expected to become fully operational in six to eight months.
Made-in-India 4G Module Targets Automotive Applications
Sensorise unveiled the Wega M1, a domestically designed and manufactured 4G GSM module targeting EVs, smart meters, logistics and other IoT applications. Based on Qualcomm technology, the module is scheduled to reach the market in the first quarter of 2027 and is positioned as an alternative to imported cellular connectivity modules.
Video Playlist
India’s One-Million-Car Export Boom
India's passenger vehicle exports are moving towards a new scale as automakers increasingly use the country as a manufacturing base for global markets. The video looks at the factors supporting this expansion and how India's role in global automotive supply chains is changing.
The $90 Billion Opportunity in Commercial EVs
Exponent Energy co-founder and CEO Arun Vinayak discusses the potential of India's commercial EV market, the economics of electrifying high-utilisation vehicles and the technology and charging infrastructure needed to accelerate adoption.
Mercedes-Benz India on EV Demand, Supply and FTAs
Mercedes-Benz India Managing Director and CEO Santosh Iyer discusses the luxury carmaker's EV demand, supply constraints and inventory situation, along with the potential impact of free trade agreements and the company's outlook for the Indian market.
The Week in Perspective
The week's developments showed an auto market that remains strong in absolute terms but is entering a more demanding phase. Record first-half retail sales and rapidly rising EV volumes point to healthy underlying demand, but higher interest rates, rising vehicle prices and a much tougher post-GST comparison base could pull down headline growth over the coming months.
At the same time, the investment pipeline remains active. New component capacity, semiconductor localisation, supplier joint ventures and overseas acquisitions indicate that companies are continuing to invest for longer-term growth even as near-term demand conditions become harder to read.
Electrification remains the other clear structural theme. Record electric two-wheeler sales, Hyundai and TVS Motor's three-wheeler programme, rising electric LCV penetration and new state bus orders show EV adoption spreading beyond passenger cars into several parts of India's mobility market.