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Weekly News Wrap: Supply Risks Amid West Asia Tensions, March Sales Forecast, HMSI Production Plans
Rising geopolitical tensions in West Asia are beginning to test the resilience of India’s automotive supply chain, even as the industry holds steady for now.
By Kiran Murali
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Escalating tensions in West Asia cast a long shadow over India’s automotive supply chain this week, with the industry staring at disruptions from potential fuel shortages, rising logistics costs and input inflation, particularly for smaller suppliers operating on thin margins.
While vehicle production has remained stable so far, industry participants are increasingly wary that a prolonged crisis could begin to weigh on manufacturing schedules and demand momentum in the months ahead.The government has reportedly advised automakers and suppliers to tighten production schedules, conserve fuel and shift toward electricity.
Despite the uncertainty, the auto component sector is holding steady in the near term, even as disruptions across key trade routes such as the Strait of Hormuz push up freight costs, extend transit times and inflate inventory levels, especially for electronics and semiconductor supplies that remain heavily import-dependent.
The government has stepped in to cushion the impact, raising commercial LPG allocation to states by 20% and prioritising supplies to critical sectors such as automobiles, while maintaining that the country has adequate fuel stocks to cover about two months of consumption.
On the policy front, the Centre has extended demand subsidies under the Rs 10,900-crore PM E-DRIVE scheme, allowing incentives for electric two-wheelers until July 31, 2026, while continuing support for electric three-wheeler registrations through March 31, 2028.
In other developments, passenger vehicle dispatches in March are seen growing 10–14% year-on-year despite geopolitical headwinds while Maruti Suzuki will Rs 10,189 crore capacity expansion in Gujarat. Some major news updates include Honda’s two-wheeler production plans,a temporary production shutdown at JLR, and manufacturing plans for Tenneco and Euler Motors.
Here is a detailed round-up of the key developments that shaped the automotive industry during the week:
West Asia Tensions: Fuel Crunch Hits India’s Auto Industry
War-related disruptions in West Asia are straining India’s auto supply chain through LPG shortages, rising logistics costs and input inflation, with smaller suppliers most vulnerable. While OEM production remains stable for now, prolonged disruptions could slow manufacturing and demand.
Govt Flags Fuel Risks to Auto Sector, Urges Production Optimisation Amid Iran War: Reuters
The government has reportedly advised automakers and suppliers to tighten production schedules, conserve fuel and shift toward electricity, while exploring recycled materials, as the government adopts a cautious stance amid rising risks to oil and gas supplies.
Govt Says No Crude or Fuel Shortage; Has Stock to Cover 2 Months
The government said India has adequate fuel supplies with crude stocks covering about two months’ consumption, dismissing shortage rumours. Ministry of Petroleum and Natural Gas added that diversified imports, high refinery utilisation and secured supplies ensure stability despite rising global crude prices.
Government Allocates 20% More Commercial LPG to States; Prioritises Auto Sector
The government has raised commercial LPG allocation to states and union territories by 20%, restoring supply to 70% of pre-crisis levels, while prioritising industries such as the automobile sector to help maintain production continuity amid ongoing supply disruptions.
Centre Slashes Excise Duty on Petrol and Diesel by ₹10 a Litre
The government has sharply reduced central excise duty on petrol to ₹3 per litre from ₹13 and eliminated it on diesel in a bid to cushion state-run oil marketing companies from mounting losses caused by the surge in global crude prices.
Govt Extends PM E-Drive Subsidy for E2Ws Till July; E3W to Get Incentives Till 2028
The government has extended demand subsidies under the Rs 10,900-crore PM E-DRIVE scheme, allowing incentives for electric two-wheelers until July 31, 2026, and continuing support for electric three-wheelers registrations through March 31, 2028.
JLR Temporarily Stops Production at Solihull Plant Due to Supplier Constraints
Jaguar Land Rover has temporarily paused production on certain vehicle lines at its Solihull plant in the UK due to a supplier constraint, with the disruption described as short-term and limited, and no material impact expected on operations or financial performance.
Honda Targets 6.79 Million 2W Production in FY27; No. 1 Spot Remains Out of Reach
Honda Motorcycle & Scooter India is targeting production of 6.79 million units in the financial year 2027, driven by premium models, exports and capacity expansion. The company aims for double-digit growth, while it is expected to remain behind market leader Hero MotoCorp.
March PV Dispatches Seen Up 10% YoY Amid West Asia Crisis
India’s passenger vehicle dispatches are expected to grow 10–14% year-on-year in March 2026 to about 4.20–4.35 lakh units, supported by strong bookings and festive demand, with West Asia-related supply chain risks yet to materially impact production.
Tenneco Plans New Plant in India as Demand for Suspension Tech Surges
Tenneco Clean Air India is evaluating plans to set up a new plant to expand capacity for its DaVinci DCx suspension technology, as strong demand from multiple automakers following its debut in Mahindra’s XUV 7XO strains current production capacity.
Vehicle Demand Firm Despite West Asia Tensions; May See Moderation in April: FADA
India’s automobile retail demand remained resilient in March despite West Asia conflict, with strong vehicle registrations and double-digit growth, FADA CEO Saharsh Dhamani said, adding that while demand across segments remains healthy, some early signs of caution are emerging among buyers.
Maruti Suzuki Board Approves ₹10,189 Crore Capacity Expansion at Khoraj Industrial Estate
Maruti Suzuki’s board has approved the first phase of a new plant at Khoraj, Gujarat, with a capacity of 2,50,000 vehicles annually. The ₹10,189 crore investment project is targeted for commissioning by 2029, subject to market conditions.
Exclusive: Euler to Add New Manufacturing Unit
Euler Motors is planning a new manufacturing unit to scale four-wheeler production to 1,000 units per month, marking a shift toward manufacturing-led growth, supported by recent funding aimed at capacity expansion, product development and localisation initiatives.
Exclusive: Balaje Rajan Moves to UK as Group Chief Strategy Officer, JLR; To Anchor TMPV–JLR Synergies
Balaje Rajan has been appointed Group Chief Strategy Officer at Jaguar Land Rover (JLR), effective April 1, 2026, marking a step towards deeper global integration within Tata Motors’ passenger vehicle business. He is currently chief strategy officer and head of international business at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility.
JSW Motors and Dassault Systèmes Announce Strategic Technology Partnership
JSW Motors has partnered with France’s Dassault Systèmes to build a digital backbone for its upcoming New Energy Vehicle portfolio, deploying the 3DEXPERIENCE platform to support product design, lifecycle management and manufacturing execution across operations.
Auto Component Sector Sees Near-term Stability, Uncertainty Beyond
Disruptions across key trade routes such as the Red Sea and Strait of Hormuz are raising logistics costs, extending transit times, and increasing inventory levels for India’s auto component sector, with electronics and semiconductor supplies particularly exposed due to import dependence.
Keysight Technologies Becomes First Test, Measurement Company to Manufacture in India
Keysight Technologies has begun manufacturing at its Chennai facility, becoming the first test and measurement company to produce in India. The plant will serve domestic and global markets, marking a structural shift for both the company and India’s high-tech manufacturing ecosystem.
Euler Motors Raises INR 437.5 Crore in Series E Round
Euler Motors has raised INR 687.5 crore through Series E equity and debt funding. The company will use the capital to expand capacity at its Palwal plant, scale its retail and service network, and strengthen core operations.
Ultraviolette Signs MoU with Karnataka Government to Expand EV Manufacturing
Ultraviolette Automotive has signed an MoU with the Karnataka government for a phased five-year expansion, investing over ₹200 crore in the first phase to upgrade capacity, followed by a new plant targeting 150,000 units annually.
ACE and Japan's Kato Works Form ₹200 Crore Joint Venture to Make Cranes in India
Action Construction Equipment and Japan’s Kato Works have formed a 50:50 joint venture, ACE KATO Pvt. Ltd., investing about ₹200 crore to manufacture high-capacity cranes in Haryana, with operations starting in 2026 for domestic and export markets.
JSW MG Motor Appoints an Ex-Tata Motors Official to Drive Purchase and Supply Chain
JSW MG Motor India has appointed Amit Rana as Director of Purchase and Supply Chain to support product and operational expansion. He brings experience from Tata Motors and Hero MotoCorp, with a focus on building a tech-driven procurement ecosystem.
Mahindra Sharpens Digital Farm Push; Appoints Pankaj Kumar to Lead Telematics
Mahindra & Mahindra has appointed Pankaj Kumar as Head of Telematics in its Farm Equipment Business, strengthening its push into data-led agricultural solutions and reinforcing the role of telematics within the company’s broader digital transformation strategy.
Iran War Likely to Hasten Self-Reliance Quest
Escalating Middle East tensions are pushing India toward bio-energy self-reliance, with ethanol emerging as a key success, while the CBG programme lags behind targets. Expanding domestic biofuels is seen as critical to reducing import dependence and strengthening energy security.
Bridgestone Sharpens India Playbook with Five-Pillar Growth Strategy
Bridgestone India is sharpening its growth strategy through a five-pillar approach spanning innovation, retail expansion, manufacturing readiness, customer experience, and talent development, as it targets India’s evolving tyre market driven by rising vehicle ownership, infrastructure growth, and premiumisation.
Video: Lexus to Tap Toyota Customer Base in India, Deepens Multi-Fuel Play
Lexus has entered India’s luxury EV segment with the ES 500e, but is pursuing a measured electrification strategy that balances hybrids, plug-in hybrids and EVs, prioritising customer choice while positioning the model against established German luxury rivals.
VIDEO- India's Car Protection Market Poised for Growth as Adoption Lags Global Peers
Despite India selling over four million cars annually, PPF adoption remains below 2%, highlighting low awareness but strong growth potential. Industry executives say India’s harsh driving conditions make paint protection more relevant than in higher-adoption markets like the US and China.
Samvardhana Motherson Signs JV with Hellmann Worldwide Logistics for Automotive Logistics
SamvardhanaMotherson has signed a joint venture with Hellmann Worldwide Logistics to provide integrated supply chain solutions for the global automotive industry, combining logistics capabilities and automotive expertise to deliver end-to-end procurement, transportation and distribution services from Dubai.
UCAL: How a 70-Year-Old Auto Parts Group is Re-Engineering for the EV Era
The Chennai-based auto components maker is shifting away from carburetors and mechanical fuel pumps, betting on electronics and exports to sustain growth amid industry-wide decarbonization.
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