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Explainer: What's in the Latest CAFE III Draft & Why it Matters

Kiran Murali — Sat, 18 Jul 2026 19:30:31

India is preparing to tighten fuel-efficiency norms for passenger vehicles once again. The Ministry of Power has released the latest draft of the Corporate Average Fuel Economy (CAFE) III regulations, which will govern fuel-consumption standards for passenger vehicles from 2027-28 to 2031-32. The draft is now open for public consultation before it is finalised.

While the latest notification introduces several refinements, the overall framework remains largely unchanged from the draft circulated to industry stakeholders in April this year. That April draft, however, was not placed in the public domain. Autocar Professional had reported on its key proposals, including the introduction of a market-based compliance mechanism, incentives for fuel-saving technologies and benefits for alternative fuels. The latest July draft largely retains those proposals while adding technical details, implementation timelines and an explanatory note.

Unlike the April draft, both the September 2025 draft and the July 2026 draft have been officially released for public consultation, allowing automakers, industry bodies and research organisations to study the proposals in detail and submit feedback before they are notified.

The new norms come at a time when India's passenger vehicle market is changing rapidly. SUVs account for a growing share of sales, hybrid technology is gaining acceptance, flex-fuel programmes are gathering pace, and electric vehicles continue to expand, although at a slower pace than initially expected. Instead of promoting one technology over another, the proposal looks to reward solutions that can reduce fuel consumption and carbon dioxide (CO2) emissions.

The objective of CAFE III remains the same as the earlier phases—to reduce the amount of fuel consumed by the country's passenger vehicle fleet. Lower fuel consumption not only reduces carbon emissions but also helps lower crude oil imports, an important objective for a country that depends heavily on imported petroleum.

Unlike emission regulations such as Bharat Stage (BS) norms, which control pollutants such as nitrogen oxides and particulate matter from individual vehicles, CAFE focuses on the average fuel efficiency of an automaker's entire passenger vehicle portfolio. That distinction is important because manufacturers are free to decide how they meet the targets, whether through better engines, lighter vehicles, hybrids, alternative fuels or electric vehicles.

Understanding CAFE and how the system works

CAFE stands for Corporate Average Fuel Economy. Rather than prescribing a fuel-efficiency target for every model, it calculates the average fuel consumption of all passenger vehicles sold by a manufacturer during a financial year.

In simple terms, every manufacturer receives an annual fuel-consumption target based on the average weight of the vehicles it sells. If the company's fleet performs better than the prescribed target, it complies with the regulation. If not, it must make up the shortfall using the compliance mechanisms available under the framework.

India introduced the first phase of CAFE norms in 2017-18, followed by CAFE II from 2022-23. The proposed CAFE III framework will cover the period from 2027-28 to 2031-32. Each successive phase has tightened fuel-efficiency requirements while allowing manufacturers flexibility in choosing the technologies needed to achieve them.

The calculation is based on an equation:

Annual Average Fuel Consumption Standard = a × (W – b) + c

Here:

'a' is the slope or constant multiplier.
'W' is the weighted average unladen mass of all passenger vehicles sold by a manufacturer.
'b' is the industry's reference average vehicle weight.
'c' is another constant that changes every year.

The formula recognises that heavier vehicles naturally consume more fuel than lighter ones. Instead of giving every manufacturer the same target, CAFE adjusts the target according to the average weight of the vehicles sold.

According to an analysis of the latest draft by The Energy and Resources Institute (TERI), the proposed framework reduces the value of the slope (a) from 0.002 under CAFE II to 0.00158 in 2027-28, gradually declining to 0.00131 by 2031-32. At the same time, the industry's average weight (b) increases from 1,082 kg under CAFE II to 1,229 kg under CAFE III.

TERI also estimates that the corresponding corporate average CO2 emissions at the reference weight tighten from 94.76 gCO2/km in 2027-28 to 76.77 gCO2/km by 2031-32, before applying Carbon Neutrality Factors. According to the institute, this represents roughly a 21% increase in stringency over CAFE II in the first year, rising to nearly 34% by 2031-32.

Meanwhile, rating agency ICRA estimates that the target will begin at 94.8 g of CO2 per km in 2027-28 and tighten steadily to 78.9 g/km by 2031-32.

ICRA expects the progressively tighter CAFE III emission targets to steadily reduce fleet-average fuel consumption over the five-year compliance period. The rating agency said the stricter norms would lead to higher annual fuel savings even as passenger vehicle sales continue to grow.

It estimates that the improved fuel-efficiency standards could generate cumulative fuel savings worth around Rs 38,000 crore during the CAFE III period, highlighting the potential economic benefits of lower fuel consumption alongside reduced emissions.

What's new in the latest draft?

At first glance, the July 2026 draft looks very similar to the version circulated to stakeholders in April. That is because most of the key proposals—including the fuel-efficiency targets, Carbon Neutrality Factors (CNFs), super credits and the new compliance mechanism—have been retained.

The latest draft mainly builds on the April proposal by adding detailed technical criteria for fuel-saving technologies, refining definitions, advancing compliance timelines and including an explanatory note on the intent behind the regulations.

The bigger comparison, however, is with the September 2025 draft, which was the last version available in the public domain before the latest notification. One of the most significant changes is the way fuel-efficiency targets are calculated for vehicles of different weights.

The September 2025 proposal used a single slope value of 0.002 throughout the five-year period and a reference vehicle weight of 1,170 kg. The revised draft lowers the slope every year, beginning at 0.00158 in FY2027-28 and reaching 0.00131 by 2031-32, while increasing the reference weight to 1,229 kg.

According to TERI, these changes make the proposed regulation relatively less stringent for manufacturers whose portfolios are dominated by lighter passenger vehicles, while increasing compliance pressure on companies with heavier fleets, particularly those with a larger share of SUVs. In other words, the target line becomes flatter, reducing the advantage that heavier vehicles previously enjoyed under the weight-based formula.

The revised draft also reflects the government's effort to move away from a purely penalty-based approach to one that offers manufacturers multiple compliance options.

Earlier CAFE regulations largely required companies to meet their prescribed fleet-average fuel-consumption targets. CAFE III introduces a market-based mechanism under which manufacturers that outperform their targets generate credits, while those falling short accumulate debits. These are recorded in a digital compliance account, or "passbook," maintained for every manufacturer.

Manufacturers with surplus credits can retain them for future compliance periods or exchange them with other manufacturers through voluntary pooling. If a company is still left with a compliance deficit after using available credits, it can buy credits from the Bureau of Energy Efficiency (BEE) at government-notified prices. The buyout price starts at Rs 2,500 per gram of CO2 per kilometre in FY2027-28 and gradually rises to Rs 4,500 by FY2031-32.

Carbon Neutrality Factors & Super Credits

One of the defining features of the proposed CAFE III framework is that it recognises multiple technology pathways instead of focusing only on pure electric vehicles.

This is where the Carbon Neutrality Factor (CNF) comes in. The draft allows manufacturers to discount a portion of a vehicle's declared CO2 emissions while calculating compliance.

Under the proposal, vehicles running on E20 or higher ethanol-blended petrol, including strong hybrids and plug-in hybrids using such fuel, qualify for an 8% Carbon Neutrality Factor. Flex-fuel ethanol vehicles and flex-fuel strong hybrids receive a much larger 22.3% benefit.

CNG vehicles receive a 5% CNF, or the prevailing compressed biogas blending percentage notified by the government, whichever is higher. Diesel vehicles will also receive a benefit linked to future biodiesel blending levels.

Alongside CNFs, the draft retains the system of super credits, which gives additional weight to cleaner vehicle technologies while calculating a manufacturer's fleet average.

Instead of counting each vehicle only once, certain vehicle categories are multiplied by a specified factor. Battery electric vehicles and Range Extended Electric Vehicles (REEVs) receive the highest multiplier of 3.0. Plug-in hybrids and flex-fuel strong hybrids receive a multiplier of 2.5, strong hybrids receive a multiplier of 1.6, while flex-fuel ethanol vehicles receive a multiplier of 1.1.

Together, CNFs and super credits underline one of the government's key policy messages. Rather than backing a single technology, CAFE III seeks to promote a mix of battery electric vehicles, hybrids, ethanol-based fuels, flex-fuel vehicles, CNG and other low-carbon options, allowing manufacturers to choose the most suitable path for improving fleet fuel efficiency.

Push for Fuel-saving Tech

One of the biggest additions in the latest CAFE III draft is the emphasis on technologies that improve fuel efficiency, even in conventional petrol and diesel vehicles. The draft allows manufacturers to claim compliance benefits for introducing certified fuel-saving technologies across their model range.

Under the proposal, each eligible technology can earn a benefit equivalent to 1 gram of CO2 per kilometre, subject to an overall cap of 9 gCO2/km for a vehicle until detailed government-approved certification procedures are put in place.

The list is extensive. It includes automatic start-stop systems that switch off the engine while idling, regenerative braking systems that recover energy during deceleration, tyre-pressure monitoring systems, six-speed or higher transmissions, efficient alternators, motor-generators used in mild hybrids, LED lighting, advanced glazing, electric water pumps, high-efficiency air-conditioning systems, solar-reflective paint and pulse-width-modulated radiator fans.

Compared with the April draft, the July notification goes a step further by specifying minimum performance requirements for most of these technologies. For example, it prescribes efficiency thresholds for alternators, minimum energy recovery levels for regenerative braking systems, performance standards for LED lighting and technical criteria for tyre pressure monitoring systems. The April draft had listed many of these parameters as placeholders, indicating that the technical specifications would be finalised later.

Some experts, however, believe the list may evolve before the regulations are finalised. TERI, in its assessment of the draft, notes that technologies such as automatic start-stop systems have already become common in many passenger vehicles. It argues that future incentives should increasingly reward newer technologies capable of delivering additional efficiency gains rather than those that are already widely adopted.

Preparing for the shift to WLTP

Another important feature of the proposed framework is the gradual transition to the Worldwide Harmonised Light Vehicles Test Procedure (WLTP).

At present, India's fuel-efficiency standards are based on the Modified Indian Driving Cycle (MIDC). Under the new draft, manufacturers will continue to comply using MIDC, but they will also have to report the fuel consumption and CO2 emissions of every model under WLTP. The government will later notify a conversion factor that will allow future compliance to move to the global test cycle.

The dual-reporting requirement is intended to help regulators collect real-world data before making a complete transition. It also aligns India more closely with international testing practices, which many global automakers already use in other markets.

What next?

The draft notification is currently open for stakeholder comments before it is finalised. While some provisions may still be refined following industry feedback, the broad direction of policy appears settled.

The proposal indicates that the government wants the industry to move towards tighter fuel-efficiency standards without mandating a single technology pathway. Instead, it looks to reward manufacturers that improve efficiency through cleaner fuels, hybrid technologies, battery electric vehicles and a growing range of fuel-saving engineering solutions.

For automakers, compliance will become progressively more demanding over the next five years. At the same time, the introduction of credits, trading, pooling and incentives for multiple technologies gives companies greater flexibility in deciding how they meet those targets.

Brokerage Nomura believes the proposed CAFE III targets are achievable for most major passenger vehicle manufacturers, although the level of electrification required will vary widely across companies. Based on its estimates for the financial year 2027-28, Maruti Suzuki would need electric vehicles to account for around 1-3% of its sales to meet the norms, while Hyundai and Tata Motors Passenger Vehicles would require an EV mix of 4-7% each. Mahindra & Mahindra, given its product portfolio, would need a significantly higher EV penetration of 13-15%, according to the brokerage.

Nomura, however, expects automakers such as Nissan, Renault and Volkswagen to accelerate their EV launches to comply with the proposed standards. It also estimates that the required EV share for all manufacturers is likely to increase by around 1-2 percentage points every year over the five-year CAFE III period as emission targets become progressively more stringent.

Tenneco Bets on India as Fastest‑Growing, Most Profitable Mega Region

Darshan Nakhwa — Sun, 21 Jun 2026 14:52:11

India is emerging as a key growth and technology hub for Tenneco, with the US-based auto component maker betting on strong domestic demand, rising export opportunities and deeper localisation to scale its business in the country. The company expects India’s contribution to its global business to rise over the next few years, supported by faster growth than several other regions. At present, India contributes around 5-7% of the company’s global revenue, but this could move closer to 10% in the coming years as domestic volumes, export orders and content per vehicle improve further.

“India has been earmarked as the fastest growing mega region for Tenneco. Also the most profitable one,” said Arvind Chandra, CEO of Tenneco Clean Air India Ltd. In the first nine months of FY26, Tenneco India reported value-added revenue of about ₹3,512.2 crore, up 10% year-on-year, and profit after tax of ₹437.6 crore. Its EBITDA margin stood at 19%.

Chandra said Tenneco India’s role has been expanded from serving the domestic market to supporting global demand. The India unit has been designated as an export hub, giving it a larger role in the company’s future growth strategy. Exports currently account for about 5-7% of Tenneco India’s sales, but the company expects this share to move towards 20% in the coming years, led by both clean air and suspension businesses.

The export order book is already improving, helped by India’s cost competitiveness and rupee depreciation. “The weaker rupee makes us more competitive. That is one of the reasons why our export order book is improving,” he said. Recent trade agreements between India and developed markets such as the UK, EU, US and other countries are expected to further support exports.

Tenneco India currently operates across two broad segments: Clean Air and Powertrain Solutions, and Advanced Ride Technologies. Clean air contributes slightly more than half of the business, while ride technology accounts for the balance. The company expects export opportunities to grow across both clean air and advanced ride technology businesses. Its clean air portfolio benefits from India’s tighter emission regulations, which are now closer to global standards.

This allows India-made products to serve both domestic and overseas markets. The company also sees potential for exports from its suspension business, particularly if its DaVinci DCx platform gains traction outside India. “Now that it’s successful in India, even China is looking at it, Europe is looking at it,” Chandra said.

The strongest near-term growth trigger for Tenneco India is its DaVinci DCx suspension technology, which was first introduced on Mahindra & Mahindra’s XUV 7XO. Unlike semi-active or fully active electronic suspension systems, DaVinci DCx uses mechanical architecture to deliver adaptive damping. It uses specially engineered discs or shim stacks, that regulate hydraulic flow depending on road impact frequency. This allows the system to improve ride comfort without relying on sensors, motors, electronic control units or complex software. It gives a large part of the comfort benefit of more expensive electronic systems, but at a much lower cost.

The cost advantage could make DaVinci DCx relevant for a large part of the Indian passenger vehicle market, especially vehicles priced between ₹4 lakh and ₹30 lakh. The company also sees potential for similar technology in commercial vehicles. The company gets about 53% of its revenue from clean air and 47% ride tech. The mix could move towards ride technologies over time, as growth in the clean air business could moderate compared to the sharp jump seen during the BS4-to-BS6 transition.

The sharp increase in interest for DaVinci DCx is likely to require additional capacity. Tenneco is evaluating a new plant, potentially in south or west India, depending on where customer demand comes from. He said the new facility, its 13th, could be a leased greenfield plant rather than a land-owned unit, as this allows faster commissioning. Tenneco has earlier used this model to set up facilities quickly.

Localisation is another major priority for Tenneco India. The company has already achieved about 90% localisation across its existing India operations. However, newer technologies still have much lower localisation levels because several components are imported, Chandra said. The company is navigating fresh cost pressures from the West Asia conflict. “Right now supplies are coming in. We don’t have a supply problem. We have a cost problem,” Chandra said.

Layam Group Sees Auto Hiring Shift to Software and EV Skills

Mukul Yudhveer Singh — Sun, 21 Jun 2026 14:46:27

India's automotive industry is becoming increasingly software- and electronics-driven. As new vehicle technologies gain momentum, the skills required across engineering, manufacturing and operations are evolving alongside them.

"Five years ago, automotive hiring was centered on production, quality, maintenance, tooling, supply chain and plant HR. While these jobs remain important, the strongest growth today is in areas such as EV powertrains, embedded software, battery systems, ADAS, telematics, cybersecurity, data analytics and digital manufacturing," says Rohet Ramesh, Director of staffing solutions provider Layam Group.

The shift is taking place alongside continued industry growth. India recorded vehicle sales of approximately 2.83 crore units in FY26, while EV registrations reached around 2.43 million units, taking EV penetration to 6.5%. As technology content within vehicles increases, demand for specialised engineering capabilities is rising alongside it.

According to Ramesh, the change reflects a broader evolution in the automotive sector. Manufacturers are increasingly seeking professionals who can work across mechanical, electrical, electronics and software domains, rather than within traditional discipline silos.

Much of the shift can be traced to the emergence of software-defined vehicles and increasingly sophisticated electronics architectures. Historically, automotive companies hired primarily for mechanical and manufacturing disciplines. Today, they are adding capabilities that were once associated more closely with technology companies.

Demand is growing for embedded software engineers, vehicle software architects, cybersecurity specialists, ADAS validation professionals, functional-safety engineers and connected-vehicle experts. On the electrification side, battery-pack designers, battery-management-system engineers, thermal-management specialists and power-electronics professionals are becoming increasingly important.

The result "is a more specialised hiring environment". "Companies are no longer simply looking for a mechanical engineer or an electrical engineer. They are increasingly looking for specific capabilities such as BMS testing, embedded software development, CAN protocols, battery diagnostics or sensor integration," says Ramesh.

The trend is visible across OEMs, suppliers and engineering service providers. As software content continues to increase, automotive organisations are competing for talent with IT services firms, semiconductor companies, AI-focused businesses and global capability centres. Recruiters, Ramesh argues, increasingly need to understand technology stacks and specialised engineering domains rather than relying solely on traditional job descriptions.

While talent shortages are frequently discussed, Ramesh believes the industry's more pressing challenge is job readiness. India continues to produce large numbers of engineers, diploma holders and ITI-certified professionals. However, many candidates enter the workforce without practical exposure to technologies that are becoming increasingly common in modern automotive operations.

In manufacturing environments, EV production requires familiarity with high-voltage systems, battery diagnostics, electronics testing and traceability processes. On the engineering side, software calibration, embedded systems, functional safety and systems integration are becoming increasingly important.

"The talent pool exists, but the industry has evolved faster than the education ecosystem. The challenge is not necessarily availability. It is ensuring that skills remain aligned with industry requirements," he says.

The changing skill mix is also influencing compensation. Layam estimates salary growth in automotive and vehicle manufacturing could reach around 9.9% in 2026, ahead of the broader India Inc average, with the strongest premiums concentrated in EVs, embedded software, electronics, ADAS, cybersecurity and automation-related functions.

Electrification is also creating new employment opportunities, although not evenly across the value chain. Much of the hiring momentum is concentrated in electric two-wheelers and three-wheelers, charging infrastructure, software development, testing and battery-pack assembly.

Citing workforce studies, Ramesh notes that a future scenario involving 30% EV penetration could create around 1.2 lakh jobs across manufacturing and electricity-related sectors, while affecting approximately 1.6 lakh jobs linked to petroleum and ICE-related activities.

Beyond hiring, workforce development is becoming an increasingly important strategic consideration. Automation and digital manufacturing are changing the skills required on the shopfloor. Factories increasingly need robotics technicians, PLC specialists, mechatronics professionals, digital quality inspectors and predictive-maintenance engineers. Even operator roles are becoming more technology-enabled through the use of connected manufacturing systems and digital work instructions.

As a result, companies are placing greater emphasis on reskilling, apprenticeships and industry-academia partnerships. "It is relatively straightforward to invest in new equipment or technologies. Developing skills takes longer and requires sustained effort from both industry and educational institutions," says Ramesh. In many ways, the evolution of automotive hiring mirrors the evolution of the vehicle itself. As products become smarter, connected and increasingly software-driven, the skills required to create them are changing as well.

Mercedes-Benz CTO Says India Now Helps Shape Software and Autonomous-Driving Technologies

Ketan Thakkar — Wed, 17 Jun 2026 15:00:00

Mercedes-Benz – the maker of the three-pointed star – is increasingly relying on India for some of the technologies shaping its future vehicles, with engineers in Bengaluru playing a growing role in software, infotainment and autonomous-driving development, the company's global chief technology officer said.

"There is a bit of India in each and every Mercedes because the competence level is so high," Dr Jörg Burzer, Member of the Board of Management of Mercedes-Benz Group AG responsible for Development and Procurement, told Autocar India and Autocar Professional during his visit to India for the launch of the all-new S-Class.

The comments offer a window into how India's role inside global automotive companies is changing. Once largely associated with engineering support and localisation work, Indian teams are increasingly contributing to technologies at the centre of the industry's transition towards software-defined and increasingly automated vehicles.

For Mercedes-Benz, that shift is most visible at its Bengaluru operations, set up in 1996, which today represent the company's largest engineering centre outside Germany.

"We basically started with hardware, then powertrain, more hardware and so on. But in the last couple of years, what really happened is that the competence centre in terms of software was really developing and picking up like crazy," Burzer said.

He identified infotainment and autonomous driving as two areas where Indian teams have established significant expertise.

"The one is infotainment. And the other one is autonomous driving."

The remarks come as automakers face growing pressure from Tesla and a new generation of Chinese manufacturers that have accelerated development cycles and made software, connectivity and digital experiences key selling points.

Yet Burzer believes the rise of software plays to the strengths of established automakers rather than diminishing them.

"I see this as an opportunity," he said.

Mercedes-Benz is working with NVIDIA on future software architectures while advancing its Level 2++ driver-assistance systems and developing Level 3 and Level 4 autonomous-driving capabilities.

According to Burzer, the challenge is no longer simply writing software but integrating it into increasingly complex vehicles.

"We are, to my knowledge, one of the only OEMs that do Level 2++ with traditional combustion engines," he said.

Many of the industry's most advanced driver-assistance systems have been introduced first on dedicated EV platforms, where software has fewer mechanical systems to manage. Mercedes-Benz is deploying similar technologies across combustion-engine, hybrid and electric vehicles.

"To bring a software stack into a combustion-engine environment where you have a transmission and an engine is more complicated than on the EV side."

For Burzer, that complexity remains an advantage for manufacturers with deep engineering expertise.

"This is the beauty of competence and tradition. You need to know how this reacts and how the software stack interacts with traditional vehicle technologies."

Autonomous driving is another area where Mercedes-Benz sees India making a growing contribution.

The company continues to invest in simulation, validation and software development as it pushes towards higher levels of vehicle automation.

"AI is one of the most important topics," Burzer said.

"You don't always have to go on the street. You can basically do that virtually as well."

Mercedes-Benz's approach to autonomous driving also differs from some rivals.

While a number of manufacturers are moving towards camera-only perception systems, Mercedes-Benz continues to employ multiple sensing technologies.

"We have radars. We have mid-range radar. We have ultrasonic sensors. We have cameras. That's our philosophy."

The company also combines a conventional rules-based perception stack with a data-driven model trained on real-world driving behaviour.

"If this end-to-end system doesn't know what to do, then it falls back to the classic stack."

Despite the growing focus on software, Burzer was equally emphatic that hardware engineering remains central to Mercedes-Benz's identity.

"It's not only software," he said.

The Bengaluru centre continues to support hardware development, testing, manufacturing simulations and engineering activities alongside software programmes.

"We have simulation on sheet-metal forming and welding in India."

For Burzer, the increasing complexity of modern vehicles means no single location can develop a vehicle in isolation.

"Automotive engineering is the ultimate teamwork."

As software, electronics, manufacturing and vehicle engineering become more tightly linked, automakers are spreading responsibilities across global teams rather than concentrating them in one geography.

That shift is helping elevate India's role inside Mercedes-Benz.

For a market that accounts for a small share of the company's global sales, its contribution to the technologies shaping future Mercedes-Benz vehicles is becoming increasingly significant.

Bosch’s India Recast

Shahkar Abidi — Sat, 23 May 2026 09:00:00

On May 21, 2026, the German engineering giant Bosch Ltd announced a 50:50 joint venture with the TSF Group’s Brakes India and Wheels India. While the deal might appear to be a localized expansion of air systems for commercial vehicles (CVs), it serves as a microcosm for a much larger, more aggressive transformation as the automotive industry in India is set to evolve rapidly by 2030 and beyond.

This move into advanced, electronically controlled air systems, targeting air compression, processing, and suspension, marks a strategic strike into what Bosch leadership calls white spaces.

With a registered office in Chennai, the global supply chain including India will be managed by entities of Bosch, Brakes India and Wheels India.

The Bosch Mobility Shift

The foundation for this transition was laid globally on January 1, 2024, when the company realigned its core operations into a unified business sector branded simply as 'Bosch Mobility'.

Apart from a branding exercise, the development suggested of a structural acknowledgment that the silos of the 20th century—separate divisions for braking, steering, and engines were obsolete in an era of technological convergence.

In India, this global realignment has acted as a catalyst. Guruprasad Mudlapur, President of the Bosch Group in India, and Managing Director, Bosch Limited has been vocal about the need for cross-domain synergies to meet an Indian market that is forging its own auto path. The goal is to move from selling individual widgets to providing the entire mobility tech stack. “This joint venture is a decisive step to shape the future of advanced air systems. By integrating premier engineering and manufacturing prowess, we are co-creating state-of-the-art, intelligent modules that will empower our customers globally to build more advanced commercial vehicles.” he noted.

“The commercial vehicle industry is at a pivotal moment, shifting from mechanical hardware to software-driven architecture.” said Sandeep Nelamangala, Joint Managing Director, Bosch Limited, and President, Bosch Mobility India. “With air systems being an important portfolio extension, the planned joint venture enhances Bosch’s overall commercial vehicle motion management portfolio, strengthening its role in software-driven mobility.” The JV with the TSF Group is the clinical application of this philosophy. By partnering with established local experts in pneumatics and hydraulics, Bosch is using the joint venture as a shortcut to market leadership in advanced electronic modules, aiming for full operations by the end of 2026.

Consolidating the Tech Stack: The RBIC Acquisition

If the TSF joint venture represents an outward-facing expansion into new segments, the acquisition of Robert Bosch Chassis Systems (RBIC) represents a consolidation of the core. In a deal valued at approximately Rs 9070 crore, Bosch Ltd is bringing the market leader in Indian safety and braking systems entirely under its roof.

This acquisition is a valuable in de-risking the transition to electrification. While the rise of electric vehicles (EVs) threatens traditional powertrain components like fuel injectors, safety systems are powertrain agnostic. Whether a vehicle is powered by a diesel engine or a battery, it still requires anti-lock braking (ABS) and electronic stability programs (ESP).

“We are in the 10th generation of ESP today,” Bosch leadership remarked during a recent investor briefing, highlighting the transition from mechanical valves to sophisticated software features like hill-hold and parking assist. By integrating RBIC, Bosch Ltd is absorbing a business with a 17% revenue CAGR and expanding margins that now top 19%. More importantly, it gives the listed entity control over the Vehicle Motion Management systems that will define the dynamics of next-generation Indian SUVs and two-wheelers.

The TACO Partnership

While safety systems provide a steady floor, the growth ceiling for Bosch India is tied to the electric motor. In mid-March, the company announced another 50:50 joint venture, this time with Tata AutoComp Systems (TACO). This partnership is laser-focused on the high-value components of the EV world: e-axles and electric traction motors.

The logic here is one of industrial scale. An e-axle is a massive, complex component, often costing around EUR 1,000 per unit. Mudlapur has noted that "current volumes in the market for e-axles are very, very small". By partnering with a domestic heavyweight like Tata AutoComp—which already supplies components for India's leading EVs—Bosch is sharing the heavy capital expenditure load while securing its place in the supply chain of India's most successful EV platforms. Operations for this JV are on track to begin in mid-2026, with meaningful revenue recognition expected by Q3 FY28.

Driving Content Per Vehicle (CPV)

The underlying driver for all these moves is a dramatic rise in Content Per Vehicle (CPV). India’s automotive landscape is no longer defined by low-cost basic mobility; it is being reshaped by a regulatory push and shifting consumer preferences toward premium, safer vehicles.

Tightening safety norms and the upcoming CAFE Phase III regulations (scheduled for April 2027) are forcing OEMs to adopt technologies that Bosch is uniquely positioned to supply. Furthermore, the introduction of Advanced Driver Assistance Systems (ADAS) in commercial vehicles—mandated for new models by January 2027, is turning the front of the truck into a high-tech sensor hub.

“India's journey as a global automotive hub is accelerating,” Mudlapur says. “We are deeply invested in delivering solutions spanning software-driven mobility, electrification, and hydrogen technology, while simultaneously focusing on making safety and connectivity accessible and scalable”.

The Competitive Crucible

However, Bosch is not navigating this transition in a vacuum. The company faces a "competitive crucible" that is redefining what it means to be a Tier-1 supplier
Competition is intensifying from three distinct fronts: Traditional Tier-1 suppliers are racing to localize their own high-tech portfolios. Secondly, agile new entrants are entering the market with flat organizational structures and software-first mindsets. Thirdly, global players like Bosch are reshaping their India strategies to compete on landed cost, benchmarking against massive production hubs like China.

Denso, Continental, ZF Friedrichshafen, Schaeffler, and Uno Minda, with Mahle, Valeo, BorgWarner are some of the players with which Bosch competes in India is various automotive segments.

“Indian manufacturing plants are number one globally in several product categories,” Mudlapur notes, adding that Bosch India houses the largest development center outside Germany. This massive R&D footprint—employing thousands of software engineers—is the company’s ultimate weapon in the war for the software-defined vehicle.

Resilience Pays

The story of Bosch India through 2030 is one of strategic patience rewarded. A decade ago, the company’s investments in ABS were bleeding as the market wasn't ready. Today, those same safety systems are the company’s most profitable engines of growth.

Bosch is now doubling down on all the potential factors that will dictate the next decade in the automotive industry.

How One Tax Cut Fuelled Every Car Maker Except MG Motor

Anurag Chaturvedi — Mon, 04 May 2026 17:08:40

The September 2025 Goods and Services Tax (GST) rationalisation lifted nearly every segment of India's passenger vehicle market in the second half of FY26. But the size of the lift ran from 23 percent at one end of the showroom to a near-doubling at the other. It redrew the pecking order in one of the country's most competitive sub-segments and left one original equipment manufacturer (OEM) finishing the year below its starting volumes.

MG Motor was the sole brand to finish with lower numbers than it started. The company's Windsor electric vehicle (EV), its primary volume driver, saw average monthly sales fall 13 percent in the post-reform period. MG did not change its product or its pricing. What changed was the competitive arithmetic around it.

Before September 2025, a small petrol car in India carried an effective tax burden of roughly 31 percent, comprising 28 percent GST and a compensation cess of about 3 percent. An EV was taxed at a flat 5 percent. The 26 percentage point gap between the two had been central to the EV value proposition in a price-sensitive market. After the reform, small petrol cars moved to a flat 18 percent with zero cess while EV taxation remained at 5 percent. The differential consequently halved to 13 percentage points. For cost-conscious buyers weighing an EV against a similarly sized petrol alternative, the calculation shifted, and not in the EV's favour.

Across the segments that did benefit, the size of each volume jump tracked the depth of the rate cut it received, and the pattern ran cleanly from the bottom of the price ladder to the top.

The deepest gain landed at the bottom of the price ladder. Micro hatches, a sub-segment that contains the Maruti Alto, came closest to a 100 percent jump in average monthly volumes between October 2025 and March 2026. The move translated into a saving of ₹50,000 to ₹65,000 on a ₹5 lakh car. No other sub-segment saw a proportional uplift of that size.

Moving up the ladder, the four-metre MUV sub-segment was the second-largest mover. The Renault Triber and its newly launched sibling, Nissan Gravite, both pitched at practical family use and both covered by the small-car rate band, benefited directly from the flat 18 percent rate.

The most telling reshuffle, however, came one rung higher, in the mid-size SUV class where median prices run above ₹18 lakh. The class as a whole grew 40 percent in average monthly volumes, posted a trailing twelve-month base of 838,000 units across about 20 competing models and is on course to cross one million units in FY 2026-27. The headline figure concealed a brisk internal redistribution. The segment's long-standing leader, the Hyundai Creta, gained just 3.3 percent, coming under pressure from the newly launched Tata Sierra. The Kia Seltos, in contrast, rose 47 percent. The Honda Elevate added 36 percent, and aided by their hybrid powertrain appeal, the Maruti Grand Vitara and Toyota Hyryder added 35 percent and 21 percent, respectively. The challengers, in other words, absorbed the larger share of the windfall while the market leader watched it pass through.

A similar challenger-led pattern surfaced in the mini SUV class. The class grew 33 percent overall, yet the Tata Punch alone rose 50 percent and cemented its position as India's most popular entry-SUV. Lower down the list, the four-metre SUV sub-segment that includes the Tata Nexon, the Hyundai Venue and the Maruti Brezza gained 28 percent, a figure matched by the utility MUV class anchored by the Mahindra Bolero and the Maruti Eeco. Medium hatches in the Maruti Swift, WagonR and Hyundai i20 mould rose 23 percent.

Even the top of the market participated, and more sharply than its price point suggested it would. Large premium MUVs such as the Toyota Vellfire and the Kia Carnival, both completely built units sold to a narrow buyer base, registered a 31 percent rise in average monthly volumes. Absolute numbers in that sub-segment are small, and the buyer profile is largely insulated from entry-level price sensitivity, which made the proportional surge unexpected.

The GST Council's decision was not aimed at any single company or powertrain. It was designed to broaden affordability across the passenger vehicle market, and on that count, the numbers clearly suggest it worked. That the same reform simultaneously narrowed the tax differential that had underpinned the EV value proposition is a consequence of the policy's design rather than its intent.

How One Tax Cut Fuelled Every Car Maker Except MG Motor

Anurag Chaturvedi — Mon, 04 May 2026 17:08:40

Across the segments that did benefit, the size of each volume jump tracked the depth of the rate cut it received, and the pattern ran cleanly from the bottom of the price ladder to the top.

How a Single GST Cut Shifted India's Car Market Out of Neutral

Anurag Chaturvedi — Mon, 04 May 2026 13:38:22

India's passenger vehicle industry added 91,000 cars to its monthly run-rate in the six months following the September 2025 Goods and Services Tax (GST) rationalisation. A permanent step-up that lifted average monthly sales from 345,627 units to more than 435,000, and turned the FY2025-26 total of five million units from a forecast into a certainty. More than the scale of the shift, it was the nature of it that carried weight. Demand at the bottom of the market had not disappeared, as purchasing-power worries had suggested through the first half of the year. It had simply been priced out.

The consistency of the recovery underlined its structural character. Between October 2025 and March 2026, monthly sales never once fell below 400,000 units. In the six months preceding the reform, the market had been virtually flat; by contrast, average volumes were lower by an unremarkable 1,327 units compared with the same period a year earlier.

The Council's intervention was narrow in design but broad in reach. Small cars, defined as those up to four metres in length with engines no larger than 1.2 litres petrol or 1.5 litres diesel, moved from a 28 percent tax with a compensation cess of 1 to 3 percent to a flat 18 percent with zero cess. On a ₹5 lakh vehicle, that change returned ₹50,000 to ₹65,000 to the buyer. Larger passenger vehicles above the four-metre line saw their cess slabs trimmed as well, which had ranged from 15 to 22 percent, though the relief there was variable. Electric vehicles, already taxed at 5 percent, were left untouched.

The response ran the length of the price ladder, from micro hatches at the entry point to large premium multi-utility vehicles (MUVs) several rungs higher. Every original equipment manufacturer (OEM) in the country, bar one, posted volume gains in the second half of the fiscal year. The breadth of the gain mattered as much as its scale, because it exposed how much of the market had been waiting for the same trigger.

For years, the dominant questions asked of the Indian car market had been supply-side ones. Which new models were launching, which OEMs were expanding capacity, which segments remained underpenetrated. The post-GST surge collapsed that framing in a single quarter. The demand had always been present. A tax structure that made the most affordable new cars a financial stretch had been holding it back.

The clearest evidence came from the bottom of the market. In the months before the reform, the Micro Hatchbacks (Maruti Alto) had fallen off industry tracking charts. That near-absence worried analysts, because the Alto buyer is not typically a driver trading up from a smaller car but someone moving from a second-hand two-wheeler to a first four-wheeler. The sub-segment's disappearance was consequently read as a signal of distress in the lower middle class. After the rate change, micro hatch sales came closest to a 100 percent jump in average monthly volumes. The revival did not reflect new demand being created. It reflected existing demand that had been suppressed.

A market that responds this sharply to a single rate change is communicating something precise about the price elasticity at the base of the consumption pyramid. The ₹50,000 to ₹65,000 that the reform transferred back to entry-level buyers is often, at that price point, the difference between a loan being sanctioned and a sale falling through.

The rate change, moreover, is permanent. The step-up from 345,000 cars a month to 435,000 is therefore a structural reset of the industry's baseline rather than a festive-season tailwind or a financing-led blip. For every player in the market, the task now is to build on to the new baseline, not chase the surge that produced it.

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How One Tax Cut Fuelled Every Car Maker Except MG Motor

The Wages of Survival: The Hidden Cost of the Noida and Manesar Protests

Anurag Chaturvedi — Fri, 01 May 2026 20:56:06

India's industrial corridors are among its most promoted assets. The workforce running them is among its least discussed. Noida, Manesar, Faridabad and Ghaziabad form a belt of industrial estates within an hour of Delhi, producing auto components, electronics and much more on contract for multinationals whose brands appear on the finished goods. The workforce that keeps them running is predominantly migrant, hired through private agencies on temporary contracts, and in most cases paid just enough to remain.

In early April, worker protests over wages broke out in Manesar. On April 9, Haryana raised its minimum wage for unskilled workers by 35%, the first revision since 2015. The jump exposed the pay gap with neighbouring Uttar Pradesh, and reached Noida within days. On April 13, roughly 45,000 workers walked off floors across the district. The unrest then moved to Bhiwadi in Rajasthan and to clusters in Uttarakhand and Tamil Nadu.

A contract worker on a Noida auto-component line takes home between Rs 12,000 and Rs 15,000 a month. The contract workers on these lines have come in from Bihar, Rajasthan and eastern Uttar Pradesh. Hence, more than half of their earnings goes to rent, food and transport. "At which point you'd be better off taking an Rs 8,000 to Rs 10,000 job locally [in his hometown]," says Balasubramanian A, senior vice president at TeamLease Services, one of the largest staffing firms. However, the key question is: Does a revised wage number settle anything?

The Productivity Factor

Bala's reading is that wages cannot be lifted in isolation, because the shop floor underneath them is not yet productive enough to carry them. "India has a productivity problem, not a jobs problem," he says. "Earlier in my career, I would have said India has an unemployment problem. That's not the truth at all." India ranks third globally by purchasing power parity, he notes, but sits 119th of roughly 200 on per-capita output, per IMF 2026 data. Income per capita tracks GDP per capita, which means a wage floor cannot be legislated far above the productivity floor without something breaking.

Most of the firms Bala is describing, he argues, are not exploiting workers by paying minimums. Many are losing money, barely surviving, or operating on single-digit margins. Which firms fall into which bucket he does not break down, and the public filings of listed Tier 1 suppliers in the belt tell a mixed story.

The risk Bala flags is not that wages rise. It is who stops hiring when they do. "Bigger companies have the capital to invest in technology, automation and processes. SMEs don't. And ironically, SMEs are the ones who create more jobs per rupee of revenue. They are more dependent on labour than on technology." His question is direct. "Do you want higher wages and fewer jobs? It could lead to exactly that situation."

The Presence Factor

Sudhakar Sethuraman, a partner at Deloitte whose practice covers employment-linked tax and regulatory compliance at OEMs working with American, French, Japanese and Korean collaborators, suggests that the unrest cannot be seen only in terms of wages and productivity, but also a failure of connection and communication. "What is primarily required is transparent, clear communication that outlines what is in it for the individual," he says. "Not communication at the end of the year, but constant communication with people. They are not machines." An employee, he adds, should feel "that the organisation, to which they are giving 8 to 10 hours a day, which is more than 50% of their waking hours, genuinely stands with them". When a workplace issue surfaces, "somewhere, some of these fundamentals will be missing".

An earlier generation of managers, particularly in the Indo-Japanese joint ventures, built their factories around exactly that discipline. In many of those plants, there was no separate canteen for blue-collar and white-collar employees. The managing director and the trainee ate in the same space. Chief operating officers walked the operational corridor every day, stopping at stations to ask trainees about the day's production.

Industry practitioners who were on those floors recall a more prosaic source of efficiency: leadership watched how materials moved through the plant, saw that storage had been placed too far from the line, shifted it closer, and watched output rise because someone had bothered to pay attention. That habit has thinned. Contract labour is now a significant share of the workforce on Indian Tier 1 floors, inside a chain where the OEM, the supplier, the contracting agency and the worker sit as four legally distinct entities. The managerial walk, in many plants, has been replaced by HR dashboards and remote-monitoring software. Employers once knew where an employee's children were studying, whether they were looking at an ITI programme. That continuity, in Sudhakar's words, delivers "greater employee commitment and significantly higher output". Bala does not accept the communication frame. "Communication isn't exactly broken," he counters. "Both sides know what the other is thinking. They're just unable to find a middle ground. The fact that you can't resolve something doesn't mean you don't understand the other side."

Upskilling: The New Blueprint for India’s Automotive Workforce

Prerna Lidhoo — Fri, 01 May 2026 20:52:14

Not too long ago, some of the toughest jobs on an automotive shopfloor were also the most physically demanding and the most risky. Workers handled heavy panels, worked in high-heat zones or carried out repetitive welding and painting tasks in environments where consistency often came at the cost of safety. Today, many of those roles look very different. Robots take on the hazardous, high-precision work, while the human worker stands a step back, monitoring systems, responding to alerts and stepping in when judgment is required. And as Vinkesh Gulati, chairperson of Automotive Skills Development Council (ASDC) puts it, the real story of the future of work in India’s auto industry lies in how labour is becoming safer, smarter and far more skilled than before. “Automation does not eliminate human roles, it elevates them and that shift from doing tasks to understanding systems is already underway,” he said.

At ASDC, he adds, this has meant a complete rethink of how workers are trained. The traditional model of role-based skilling is being replaced with capability-based learning. Workers are now expected to go beyond execution to interpretation which includes reading dashboards, responding to predictive maintenance alerts and making judgment calls in real time.

“The future shopfloor professional must understand not just what to do, but why systems behave the way they do,” Gulati explains. That’s why ASDC is embedding data literacy, sensor diagnostics and process intelligence into its training frameworks aligned closely with actual factory deployments.

For millions of workers in repetitive roles, this transition could have been disruptive. But Gulati insists inclusion is central to the transition. ASDC is rolling out short-cycle, vernacular-friendly training programmes designed to help workers move up the value chain without being left behind. “Assembly workers are being trained to monitor multiple stations, interpret alerts and take corrective action. The goal is not just productivity, it is long-term employability with dignity,” he said.

AI is not replacing roles as much as redefining them. Take quality inspection which was once heavily dependent on manual checks. Today, AI handles much of the detection but humans step in for exception management, training algorithms and validating edge cases. At the same time, entirely new roles are being created as the industry shifts toward electrification and software- defined vehicles. These include battery assembly specialists, BMS validation technicians, thermal safety experts, ADAS calibration engineers and OTA validation professionals. ASDC has developed qualification packs for many of these roles in partnership with industry. “Demand is outpacing supply highlighting the urgency of scaling structured skilling interventions,” Gulati notes. Despite all the noise around robotics, India’s automotive sector is still only about 25–30% automated today, especially when the broader supplier ecosystem is included. That figure is expected to rise to nearly 50% by the end of the decade. Automation, he said, will deepen in areas where precision, safety and consistency are critical like Body-in-white, assembly lines and internal logistics, where autonomous mobile robots are likely to become commonplace.

“The real change will be in how humans interact with automated systems, rather than a complete replacement of labour. Human involvement will remain critical in assembly, customization and quality oversight,” Gulati says. He added that leading companies are investing in internal mobility frameworks, mapping employees to adjacent roles and enabling structured retraining while maintaining job continuity. However, this approach is uneven. Smaller suppliers, often constrained by tight margins, find it harder to invest in long term workforce transformation.

Hiring is Changing

While macro uncertainties, be it geopolitical tensions in West Asia or rising logistics costs add caution to workforce planning, the industry isn’t freezing hiring. Instead, it’s becoming far more selective. “There is a clear preference for multi-skilled, job-ready professionals, particularly those with digital and systems understanding,” Gulati says. Hiring for traditional internal combustion engine (ICE) roles is slowing, while demand is accelerating in electronics, EV systems, software integration and supply chain digitisation, he adds. This is also where ASDC sees its role expanding in bridging the gap between industry expectations and workforce readiness through hands-on, certification-driven training, according to Gulati.

On the policy side, India’s new labour codes are beginning to reshape workforce structures by standardising wages, working hours and compliance frameworks. For companies, this means more predictable workforce management. For workers, it promises greater income stability and protection provided implementation remains consistent. “In a sector like automotive, this balance between flexibility and compliance discipline is essential for the next phase of growth,” Gulati says.

If AI is reshaping the present, electrification and software-defined vehicles are redefining the future. Over the next 10–15 years, demand for traditional powertrain skills will steadily decline. In their place, a new cluster of competencies is emerging: high-voltage safety, battery technology, thermal management, power electronics, embedded diagnostics and even vehicle cybersecurity. The disruption will be particularly sharp in the after-sales ecosystem, which is still heavily ICE-focused today.

ASDC is working to integrate EV-focused training into ITIs and state-level programmes, but Gulati acknowledges a fundamental challenge: “The pace of technological change is faster than formal systems can adapt.” Which is why continuous, industry-led skilling, not one-time training, will define the future of labour in India’s automotive sector, he said.

How Tata Motors’ Lucknow Plant Evolved from the 407 Era to a Million-Vehicle Milestone

Shahkar Abidi — Thu, 16 Apr 2026 14:16:16

On April 25, 2026, the industrial landscape of Uttar Pradesh marked an important milestone as Tata Motors celebrated the rollout of its 10th lakh commercial vehicle from its Lucknow facility. This achievement is the culmination of a three-and-a-half-decade journey that began in the mid-1980s. At that time, the state government provided 6,000 acres on Deva Road, hoping a modern private-sector entrant could repair an industrial reputation then marred by labour unrest at state-owned firms. The plant’s first truck, a variant of the LP-1210, eventually debuted in late 1992, following a 1986 groundbreaking ceremony.

Strategic Entry
The decision to establish this greenfield site was deeply tied to the 1986 launch of the Tata 407. As a purely homegrown light commercial vehicle, the 407 did more than just capture the domestic market from international rivals; it effectively rescued the company from a financial crisis. The resulting surge in demand necessitated a specialised production hub beyond the traditional centres in Jamshedpur and Pune, positioning Lucknow as a critical pillar in Tata’s national strategy. Today, that strategy has evolved from simple assembly to high-tech customisation through an on-site Engineering Research Centre that validates new designs for specific customer needs.

Flexibility is Key
The facility's modern identity is defined by what leadership calls "multi-fuel" agility. Vishal Badshah, Vice President and Head of Operations at Tata Motors, notes that the plant is capable of producing diesel, CNG, electric, and hydrogen fuel cell vehicles on the same assembly lines. Badshah describes this integrated approach as one of the industry's most innovative practices, bolstered by a Digital Command Control Centre that monitors critical manufacturing processes in real time. This technological leap allows the plant to handle everything from 4-tonne light trucks to massive 55-tonne heavy-duty haulers without traditional production bottlenecks.

Expanding the Product Portfolio
A significant portion of the plant’s legacy involves its role in the bus segment, which currently accounts for roughly 25% of total production. This capability was sharpened by a 2006 partnership with the Brazilian firm Marcopolo S.A., which focused on "fully built" buses—vehicles delivered with the body and interior complete, rather than just the frame. Although Marcopolo exited the venture after 15 years to refresh its global strategy, Tata Motors successfully integrated the expertise, continuing to manufacture the Starbus and Ultra brands independently.

Way Ahead
Looking ahead, the Lucknow facility is positioned for significant growth without the immediate requirement for physical expansion. During the last fiscal year, the plant utilised approximately 60% of its one-lakh-unit annual capacity, producing 56,000 vehicles. This spare capacity provides a strategic cushion as the market shifts towards greener technologies like hydrogen and electric power.

UCAL: How a 70-Year-Old Auto Parts Group is Re-Engineering for the EV Era

Autocar Professional Bureau — Fri, 27 Mar 2026 13:07:49

In June 2007, Adithya Srivatsa Jayakar was a high school graduate preparing for a sociology degree at Butler University, but his real education began on the factory floors of Illinois.

He joined Amtec Precision Products, a U.S. subsidiary of the Chennai-based UCAL Ltd., as a trainee, just two years after the Indian parent company acquired the firm to gain a foothold in the American automotive and defense markets. Nearly two decades later, after an Executive MBA from Notre Dame and a rotation through every major corporate function, Jayakar was appointed Deputy Managing Director in November 2024 to steer the legacy manufacturer through evolving technologies and market dynamics.

Today, UCAL, a company built on the precision of carburetors and mechanical fuel pumps, is aggressively pivoting toward a future defined by mechatronics and electric vehicles (EVs).

Under Jayakar’s leadership, the firm is attempting to balance the books by milking the high-margin aftermarket, while investing significantly in electronics that will keep it relevant in a decarbonized world.

Jayakar is the son of Jayakar Krishnamurthy, CMD of UCAL Ltd. His grandfather, Dr. V. Krishnamurthy, was the founding Chairman of Maruti Suzuki and also the Chairman of BHEL and SAIL.

The Survival Strategy: Aftermarkets and Exports
The shift is not just a strategic choice; it is a necessity for business resilience as legacy products phase out. UCAL’s response has been to aggressively target the aftermarket segment, which Jayakar describes as "a significant market." Unlike selling directly to car manufacturers (Original Equipment Manufacturers or OEMs), the aftermarket allows for higher margins and direct consumer reach. To achieve this, UCAL rapidly expanded its distribution channels and increased its market reach to new geographies.

Simultaneously, UCAL is leveraging its legacy expertise to fuel a surge in export earnings from regions like Latin America, Africa, and the Middle East. In the more advanced North American market, it is pitching high-tech indigenous innovations like specialized fuel rails for premium cars and vacuum pumps.

“We want to play as a dominant player in newer technologies,” Jayakar says, emphasizing that the company is no longer just a component maker but an engineering-led firm.

Engineering the Pivot: From Mechanical to Mechatronics

The broader automotive component industry is currently caught in a transition between two eras. Companies like UCAL, and its competitors Uno Minda and Endurance Technologies, must master mechatronics, the fusion of mechanical systems with electronics. For UCAL, this means repurposing decades of air and fuel management knowledge into EV architectures.

UCAL has established a dedicated R&D center for electronics to develop sensors and embedded systems for green mobility. This technical transformation is backed by a heavy investment cycle; between FY21 and FY25, UCAL’s capital expenditure (capex) totaled approximately Rs 107.48 crore, peaking at Rs 45.79 crore in FY24 as new production lines were established. At its Maraimalai Nagar plant, the company has commissioned lines for high-potential components like Intake Throttle Valves, while a new facility at Mahindra World City is dedicated solely to export-bound water outlets.

Currently, core products like throttle bodies and oil pumps still account for over 50% of revenue, but the move into premium segments is gaining ground. Sales of throttle bodies alone grew by over 20% year-on-year during FY25, helping to buffer the declining demand for older technologies.

The Road Ahead: A Decarbonized Identity

As the Indian government pushes for aggressive sustainable mobility goals, UCAL is attempting to integrate sustainability into its operational identity. The company now draws more than 70% of its power from renewable sources like wind and solar and is exploring "net zero" opportunities in hydrogen and micro-mobility.

For Adithya Jayakar, the goal is to complete the transformation he began as a trainee in Illinois: moving UCAL from a local carburetor manufacturer to a global, diversified engineering powerhouse capable of surviving the electric revolution. While the transition is fraught with challenges like material scarcity and infrastructure gaps, UCAL’s proactive shift suggests a firm determined not to be left behind in the combustion era.

UCAL: How a 70-Year-Old Auto Parts Group is Re-Engineering for the EV Era

Autocar Professional Bureau — Fri, 27 Mar 2026 13:07:49

In June 2007, Adithya Srivatsa Jayakar was a high school graduate preparing for a sociology degree at Butler University, but his real education began on the factory floors of Illinois.

Today, UCAL, a company built on the precision of carburetors and mechanical fuel pumps, is aggressively pivoting toward a future defined by mechatronics and electric vehicles (EVs).

Jayakar is the son of Jayakar Krishnamurthy, CMD of UCAL Ltd. His grandfather, Dr. V. Krishnamurthy, was the founding Chairman of Maruti Suzuki and also the Chairman of BHEL and SAIL.

“We want to play as a dominant player in newer technologies,” Jayakar says, emphasizing that the company is no longer just a component maker but an engineering-led firm.

Engineering the Pivot: From Mechanical to Mechatronics

The Road Ahead: A Decarbonized Identity

UCAL: How a 70-Year-Old Auto Parts Group is Re-Engineering for the EV Era

Autocar Professional Bureau — Fri, 27 Mar 2026 13:07:49

In June 2007, Adithya Srivatsa Jayakar was a high school graduate preparing for a sociology degree at Butler University, but his real education began on the factory floors of Illinois.

Today, UCAL, a company built on the precision of carburetors and mechanical fuel pumps, is aggressively pivoting toward a future defined by mechatronics and electric vehicles (EVs).

Jayakar is the son of Jayakar Krishnamurthy, CMD of UCAL Ltd. His grandfather, Dr. V. Krishnamurthy, was the founding Chairman of Maruti Suzuki and also the Chairman of BHEL and SAIL.

“We want to play as a dominant player in newer technologies,” Jayakar says, emphasizing that the company is no longer just a component maker but an engineering-led firm.

Engineering the Pivot: From Mechanical to Mechatronics

The Road Ahead: A Decarbonized Identity

Middle East Conflict Forces India to Rethink Energy Dependence

Arunima Pal — Mon, 23 Mar 2026 14:30:25

As escalating conflict in the Middle East keeps global energy markets on edge, India will have to attempt a radical shift toward bio-energy sovereignty. Faced with an 85% reliance on imported energy and a volatile geopolitical landscape, the world’s most populous nation would have to work to establish a "new normal" that prioritizes domestic self-reliance over fragile global supply chains, remarked industry captains.

"Most of the countries that actually suffered from this (energy sourcing), they will work out a new normal for energy," said Atul Mulay, President of Corporate Strategy at Praj Industries, a leading bio-energy technology provider.

Industry experts pointed out that the anticipated shift should be seen in the context of logistical bottlenecks, including the near blockage of the Strait of Hormuz, which have made energy security synonymous with national sovereignty. New Delhi has walked a diplomatic tightrope, navigating U.S. pressure on Russian crude sourcing while monitoring shifting alliances in the Middle East.

The impact has been tremendous. Geopolitical tensions since the beginning of the Iran-US-Israel war on February 28 have not only raised crude prices but also created severe shortages of gas and commodities including those used in the automotive ecosystem. India will also have to consider a future where its neighbourhood is likely to change in the coming years with some countries forming their own 'NATO-like' regional forces, which may further complicate matters.

Automotive Friction

India's new normal will depend heavily on reducing the country's fuel sourcing needs. According to experts, this could be largely achieved through greater adoption of biofuels, which are abundant considering India remains largely an agrarian economy. For instance, the nation's ethanol blending program has been one of its success stories in the green transition with the government advancing its E20 (20% ethanol blending in petrol) targets by five years, moving the deadline from 2030 to 2025.

This trajectory has established India as the third-largest ethanol producer in the world. India’s adaptability has resulted in the production of 1700 crore liters of ethanol, significantly exceeding the 1000 crore liters required for the 2025 target, leading the government to permit exports.

As per the government data, ethanol blending has already saved an estimated 1.55 lakh crore rupees and substituted roughly 2.66 lakh metric tons of crude oil. The program has led to a reduction of 800 lakh metric tons of CO2 emissions and approximately Rs 1.36 lakh crore has been paid back to farmers for ethanol feedstocks.. There were even plans to take the blending levels to E27, E30, and even further up.

However, the ethanol blending program faced its share of challenges. Last year, there was social media outrage over the issue from certain sections of the general public and media, who worried about its corrosive nature harming the health of their vehicles. Motorists, especially those with older vehicles not explicitly designed for E20, voiced fears of a drastic reduction in mileage and long-term corrosion of mechanical components.

Anecdotal reports suggest efficiency losses of 15-20%, although official Automotive Research Association of India tests indicate a smaller dip of 1-6% , varying by vehicle and usage. Although the government denied the allegations, with Minister Nitin Gadkari even terming them "politically motivated", critics' apprehensions have not been successfully addressed.

Consequently, the ethanol blending program appears to have plateaued since then, as the government has not officially announced any policy regarding increasing the blending levels.

Bharati Balaji, Dy. Director General, All India Distillers’ Association (AIDA) stated that the ethanol blending programme assumes critical importance in this context (Iran-US-Israel war). Accelerating the adoption of higher blending levels will not only reduce import dependence but also enhance energy security and provide greater stability against external shocks. India’s ethanol industry has already made substantial investments and is well-positioned to support this transition.India’s 1800 crore litre ethanol capacity is a strategic energy reserve to explore. "A calibrated and forward-looking roadmap to increase blending targets will be essential to fully leverage the country’s existing production capacity and ensure long-term sustainability of the biofuel ecosystem" Balaji noted.

The Stalled Promise of CBG

While ethanol has flourished, India’s SATAT (Sustainable Alternative Towards Affordable Transportation) program has languished. Originally targeting 5,000 Compressed Biogas (CBG) plants, the program has barely 130 plants on the ground.

In 2018, the Indian government unveiled an energy roadmap that was as audacious as it was green: a plan to deploy 5,000 large-scale compressed biogas (CBG) plants to convert the nation’s agricultural waste into 15 million metric tons of homegrown fuel. Seven years into the initiative, known as SATAT (Sustainable Alternative Towards Affordable Transportation), the arithmetic of India’s energy transition is failing to add up.

As of January 2026, only 133 plants are functional, producing a mere 926 tonnes per day. This supply crunch comes at a precarious time for the domestic automotive industry. Sales of CNG-powered passenger vehicles have surged, with market share jumping from 6% in 2020 to nearly 20% in 2025. While major manufacturers like Maruti Suzuki and Tata Motors have moved aggressively toward gas-based models, the fueling infrastructure remains stuck in a cycle of lack of local focusl and systemic bottlenecks.

Compressed Biogas (CBG) is a renewable, eco-friendly fuel chemically identical to the natural gas (CNG) used to power cars and trucks. While standard natural gas is a fossil fuel extracted from the earth, CBG is green because it is produced from organic waste that would otherwise be discarded or burned.

Dr. DK Ojha, Deputy Director General with the Ministry of Petroleum and Natural Gas (MOPNG), during a recent interaction with Autocar Professional suggested that biofuels, the fuels derived from organic matter like sugar, bamboo and others, are poised for significantly faster adoption by the automotive sector than electric vehicles (EVs). This shift is not merely a matter of preference but a pragmatic response to India’s unique economic and logistical landscape.

A Circular Future

Despite the current hurdles, the strategic imperative is clear. The move toward a bio-energy-led economy is not just about fuel; it is a circular economy model that keeps capital within the country. By shifting from imported crude to domestic ethanol and CBG, India can stop billions of dollars from flowing out to foreign regimes.

“If we build our own energy, produced within our borders, from our own resources, we don’t just insulate ourselves, we future-proof the nation." A circular bioeconomy can transform India’s vast agro-produce and agro-residue into sustainable fuels, reduce import dependence, and power true energy self-reliance. This is not just resilience, it is sovereignty in action.” Mulay concludes. As the global energy map is redrawn by conflict and new alliances, India’s best defense may well be its own fields.

“Despite 25% Price Rise, Fundamentals Intact for Future Growth”: Audi’s Dhillon

Ketan Thakkar — Wed, 18 Mar 2026 15:25:59

India's luxury car market should have been in a far stronger place by now. Wealth is rising, aspiration is deepening, and premiumisation is visible across segments. Yet, volumes have stayed stubbornly range-bound.

The segment continues to operate at 50,000–52,000 units annually and 1–1.5% penetration of the overall passenger vehicle market. For a market of India's size, this remains disproportionately small.

For Balbir Singh Dhillon, Head of Audi India, the explanation lies in a fundamental reset. "If you see the last five years, the prices of luxury cars have gone up by about 25%. That's unusual. The starting transaction price has moved significantly higher," he said.

That shift has pushed the average price of a luxury car beyond ₹50–60 lakh, raising the entry threshold and, in turn, slowing the pace at which first-time buyers are stepping into the segment.

Part of the reason has been currency movements. The rupee has seen a sharp 15–20% depreciation against the euro over the past 12–18 months, significantly increasing import and localisation costs for luxury carmakers with euro-linked supply chains. Manufacturers have been able to pass on a significant portion of these increases to customers, supporting higher realisations, though not without tempering volume growth.

A More Staggered Path Into Luxury

The impact is not a collapse in demand, but a shift in how that demand is playing out.

What was once a relatively direct jump from mass-market to luxury has become more staggered. Buyers are increasingly pausing at ₹25–40 lakh premium offerings from mainstream manufacturers, which now deliver higher levels of features and perceived luxury, effectively stretching the upgrade cycle.

The competitive intensity at the top end is also evolving. The growing presence of EVs, along with the entry and expansion of newer players such as MG Motor and BYD, is widening the choice set within the broader premium and luxury space. This is likely to be further bolstered by JSW's upcoming automotive foray under its own brand, adding another layer of competition in the electrified and premium segments.

"Today, customers are evaluating more options before making that move. That's a natural evolution of the market," Dhillon said. However, he sees a positive side to the rising appetite for the premium-mainstream offerings. "Jumping from ₹15 lakh to ₹50 lakh is not easy. But if someone is already at ₹30–35 lakh, we are widening the base of future luxury buyers.”

Higher Prices, Stronger Realisations

Even as volumes have seen moderate expansion, or may be because of that, the per-car realisations have gone up. Buyers are increasingly opting for higher trims, greater personalisation and feature-rich variants, along with a visible shift toward top-end models within the luxury portfolio.

Hence, the top-end of the market continues to sustain strong growth momentum, indicating that demand at higher price points remains resilient even as entry-level luxury sees slower expansion.

Similarly, there is no noticeable drop in loyalty. The luxury car market is increasingly being sustained by existing customers upgrading within the ecosystem, rather than relying solely on first-time buyers. While the top of the funnel may be expanding more gradually, the conversion and retention within the segment are strengthening, improving lifetime value per customer.

"Customer loyalty today is among the highest we have seen. That's a very important indicator for long-term growth," he added. For Dhillon, one in three Audi buyers is a repeat customer. The company now sells one pre-owned car for every new car. "For every new car that we sell, we are also selling one pre-owned car. And once a customer enters luxury, 95% of them don't leave," he noted.

The Next Growth Triggers

Dhillon, nevertheless, is a strong believer in the broader story. "Last year alone, India added around 60 billionaires. In a country with about 360 billionaires, that tells you how fast wealth is getting created," Dhillon said.

Wealth creation, he believes, will get a boost thanks to macroeconomic shifts, including trade agreements such as the India–EU Free Trade Agreement (FTA). "For me, only 20% of the FTA story is about cars. The remaining 80% is about wealth creation," Dhillon said. "When wealth gets created and money comes into people's hands, luxury consumption will grow. That's the real trigger," he said.

Audi's Reset

Audi's recent performance in India cannot be viewed in isolation from its strategic choices. The brand has, over the past few years, slipped down the pecking order, exiting key segments such as diesel and facing gaps in its EV portfolio, even as rivals expanded aggressively across powertrains.

Dhillon pushed back on the idea of underperformance. "We have to look at the segments we are participating in. In those segments, we continue to have a sizable presence," he said.

The absence of diesel and the temporary gap in EV offerings have undoubtedly constrained volumes, but Dhillon framed these as portfolio choices rather than structural weaknesses, pointing to a broader product reset underway globally.

What he did confirm is that 2026 will be a defining year, with a phased rollout of new products and a clearer articulation of strategy expected in the coming months.

"This is going to be a defining year for us. We will start bringing in new products and share more details at the right time," he said. "Our endeavour will be to grow in line with the market, if not faster. The numbers will follow as the right products come in," he said.

For Audi, the path back is likely to be defined not by a single breakthrough, but by a measured rebuild of portfolio depth and market relevance, aligned with a broader industry transition that is still playing out.

Why Women-led Factory Floors Make Business Sense

Anurag Chaturvedi — Thu, 12 Mar 2026 14:47:34

Walk into a battery assembly plant in India's southern automotive belt today, and you are likely to find something that would have been unusual on a car factory floor a decade ago: most of the workers are women.

This is no coincidence, nor is it a CSR initiative. It is the result of what electric vehicles demand.

Battery assembly, sensor calibration, and electronics integration require fine motor control, sustained concentration, and accuracy. Where the internal combustion engine once valued physical strength, the EV prioritises dexterity—and increasingly, working alongside robots that perform what muscle once did. As automation takes over lifting, pressing, and torque-heavy tasks that previously defined the male-dominated factory floor, what remains is work that no longer sorts by gender. Companies have followed this logic to its practical conclusion.

The results are tangible. Women make up less than 20 percent of the workforce in heavy assembly, according to estimates from TeamLease, one of India's largest staffing firms. In component manufacturing—dashboards, instrument clusters, and electronics—that share rises to between 30 and 40 percent. The gap aligns almost exactly with where electrification, and the automation accompanying it, has advanced most.

"Manufacturing is now moving towards precision-based quality robotics, which is actually opening many opportunities for women to enter the field," says Malvika Mathur, Director at Deloitte India's automotive practice. She argues that what the industry is experiencing is not a cultural shift but a structural one: the nature of the work changed first, followed by the workforce.

The Business Case

Balasubramanian Anantha Narayanan, Senior Vice President at TeamLease, has spent years placing workers across automotive corridors. He describes the original rationale straightforwardly. Companies in these regions found that women offered comparable skills, lower attrition, and longer tenure. The business case, he states, is simple.

The retention trend has a specific shape. Many women placed by firms are second earners in their households. A small wage increase at a competitor is rarely worth risking their stable secondary income. Men, often primary breadwinners, tend to switch jobs out of necessity for the same increment. Over time, this results in female-majority factory floors being more stable and cheaper to maintain.

Regulatory changes have further influenced this calculation. Amendments to labour laws now allow women to work night shifts beyond 7 PM. "So even from your tier 3, tier 4 cities, where the employer needs to make adequate arrangements, that push has already come into play," Mathur says. Equal opportunity, coupled with proper safety and transport infrastructure, provides access to a labour supply previously unavailable on second and third shifts.

The EV transition sharpened this logic into a hiring template. Balasubramanian describes battery manufacturing plants in the South as the clearest examples. He notes that factories set up to build EV batteries are predominantly or entirely run by women. This isn't a diversity target; it is a hiring decision based on productivity in a manufacturing segment that barely existed at scale five years ago.

A Perception That the Work Has Outpaced

Malvika Mathur joined the automotive industry about fifteen years ago. "When I joined as a young trainee, there was less representation of women across the automotive sector," she recalls. "Automotive is often perceived as a man's domain because of the physical nature of the work. Everyone thinks manufacturing involves heavy lifting."

This perception is now fundamentally at odds with the industry's current state.

The shift matters because perception shapes the pipeline. For years, women avoided automotive manufacturing not because they couldn't do the work, but because the image of the work discouraged them. EV manufacturing is gradually changing that image from within. A factory floor focused on circuit boards and battery modules looks different from one centred on engine blocks and drivetrains—and it hires differently.

Rajat Mahajan, Partner and Automotive Sector Leader at Deloitte India, identifies visibility as the key mechanism that bridges this gap. "Over time, because of women in senior roles, they rise through the hierarchy," he explains. "They also come from outside and challenge the status quo, inspiring other women to see them as role models."

Data Behind the Change

Broader labour market data reflects the direction of this shift. The government's Periodic Labour Force Survey published in November 2025 reports an overall female labour force participation rate of 35.1 percent, up from 32.0 percent in June the same year. The rural female rate rose sharply to 39.7 percent from 35.2 percent. Female unemployment fell from 5.4 percent in October to 4.8 percent in November.

These numbers indicate more than increased female job seekers; industries are actively integrating women into the workforce. The rural female Worker Population Ratio rose to 38.4 percent in November 2025, suggesting that factory floors and industrial corridors are contributing more to women's paid work than office settings.

India's automotive sector accounts for 7.1 percent of GDP, roughly 49 percent of manufacturing output, employs around four million people directly, and supports an estimated 26 million jobs across its value chain. Even small shifts in gender composition translate into large absolute numbers.

The GCC layer introduces another perspective. India's automotive Global Capability Centres—engineering and technology hubs established by major manufacturers—are seeing strong female participation in engineering, product development, and software, according to Mahajan. Mathur estimates women comprise roughly 43 percent of STEM enrolment in India, while Mahajan says at least 30 percent of entry-level software engineers are women.

Geography of Change

The transformation is most visible where industrial density and infrastructure converge: Tamil Nadu's Greater Chennai manufacturing belt, the Hosur corridor on the Karnataka border, and automotive clusters in Maharashtra and Gujarat. Balasubramanian attributes this partly to the South's historically higher female literacy rates and comparatively lower stigma around women in formal employment.

Retaining women once employed has required investments the industry once overlooked. "Many factories don't even have separate toilets for women, and if they do, they're not kept clean," Balasubramanian explains. Companies are now offering subsidised transport, meals, and creche facilities. Mixed-gender security teams are also being deployed so female workers have someone they can approach if they feel unsafe.

What the Programmes Reveal

The industry's investment in developing this workforce is becoming measurable through CSR disclosures. Under the Companies Act 2013, eligible companies must allocate two percent of average net profits to CSR, including vocational skill development.

The 2026 CSR Activities of the Indian Automobile Industry, published by the Society of Indian Automobile Manufacturers, reports on disclosures from 17 member OEMs. What emerges is less a coordinated strategy and more a series of parallel efforts—all pointing in the same direction.

Hero MotoCorp's Project Saksham has trained 4,113 women as two-wheeler technicians and sales professionals across 21 states. Of these, 3,555 have been certified and 1,660 placed in jobs. The roughly 40 percent placement rate highlights both the programme's scale and the gap between training and employment.

Mahindra & Mahindra's Project Kaabil has reached over 1.1 million women from marginalised communities. Skoda Auto Volkswagen India has upgraded five all-women ITIs in Maharashtra, embedding robotics, mechatronics, and paint technologies into their curricula.

JSW MG Motor India's Wings to Fly initiative trained women to drive, linking mobility access to employment. Mercedes-Benz India's Katalyst programme supported 100 female engineering students with more than 300 hours of training and industry internships.

The Middle Gap

The challenge now is not entry but retention and progression.

Balasubramanian notes that women are most accessible within a specific life stage—between roughly 18 and 25—after entering the workforce but before marriage changes their circumstances. Many plan to work for four to six years, save money, and then leave the workforce.

This model fills entry-level roles at scale but does not create a sustainable career pipeline. "There are a lot of drop-offs happening as we go up the ladder," Mathur says. "One thing we need to focus on is how to get younger women into the fold—and how to keep them there."

There are exceptions. Balasubramanian mentions a woman who began as an apprentice at a major auto plant and, within five years, was supervising 250 people. But such cases remain rare.

The issue is structural. The industry has invested heavily in bringing women in at the entry point, but the infrastructure for what follows—flexible return-to-work schemes, mid-career re-entry after family breaks, and clear pathways from shop floor to supervisory roles—is not yet standard practice.

The EV transition has changed who the industry hires. Whether it will change how far women can advance remains to be seen.

What the Statistics Have Not Yet Captured

India's November 2025 PLFS data complicates a straightforwardly optimistic narrative. While rural female labour participation has surged, urban participation remains steady at around 25.5 percent.

The expansion of Global Capability Centres and white-collar automotive roles has not yet shifted the urban headline number. Structural shifts often appear on factory floors long before they show up in national statistics.

The factory floors of Hosur, Sanand, and Aurangabad reveal something policy debates have long sought: employer demand that precedes social mandate.

Companies themselves describe the change in practical terms.

"These things are not PR stunts," Balasubramanian says. "There is a genuine business case for it."

That distinction between goodwill and productivity is what the EV transition has quietly made possible. The industry did not set out to hire more women. It set out to build a different kind of car. The workforce followed the work.

Why India’s CBG Revolution is Stuck in Neutral

Arunima Pal — Thu, 05 Mar 2026 16:51:41

As of January 2026, only 133 plants are functional, producing a mere 926 tonnes per day. This supply crunch comes at a precarious time for the domestic automotive industry. Sales of CNG-powered passenger vehicles have surged, with market share jumping from 6% in 2020 to nearly 20% in 2025. While major manufacturers like Maruti Suzuki and Tata Motors have moved aggressively toward gas-based models, the infrastructure required to fuel them remains stuck in a cycle of hyper-local and systemic bottlenecks.

Compressed Biogas (CBG) is a renewable, eco-friendly fuel chemically identical to the natural gas (CNG) used to power cars and trucks. While standard natural gas is a fossil fuel extracted from the earth, CBG is considered green because it is produced from organic waste that would otherwise be discarded or burned.

The Institutional Hurdle
The primary friction point isn't a lack of technology, but a lack of administrative continuity. Industry analysts note that waste-to-fuel projects often live or die based on the personal enthusiasm of individual city commissioners. “The commissioner may start a project with enthusiasm but then get transferred within two years, leaving the next official without the same commitment to carry it on,” one expert observed during the recent India Energy Week 2026.

This instability is compounded by a fragmented regulatory landscape. Project developers must navigate upwards of eight government departments that rarely coordinate. Charlotte Morton, Chief Executive of the World Biogas Association, noted that policies across India today are very fragmented, preventing many developers from reaching financial close.

Logistical and Structural Strains
Unlike the ethanol sector, which benefits from centralized feedstock, CBG requires coordinating thousands of small-scale farmers across dispersed landholdings. For plants utilizing Municipal Solid Waste (MSW), the challenge is even more granular: inadequate pre-segregation leads to contaminated waste that damages expensive digestion equipment and suppresses gas yields.

Once produced, getting the gas to the pump is the next crisis. Currently, only 15% of functional CBG plants are connected to City Gas Distribution (CGD) networks. The remaining facilities rely on mobile cascades—pressurized cylinders moved by truck—which are expensive and logistically complex. A report by the International Energy Agency (IEA) highlighted that this method increases the fuel’s carbon footprint, potentially defeating the purpose of a green fuel.

The Economics of Waste
The financial viability of these plants is further strained by low utilization rates. While European biogas plants often operate above 80% capacity, Indian facilities frequently hover between 20% and 60% due to seasonal feedstock variability.

Furthermore, a CBG plant is as much a fertilizer factory as it is a fuel station. “CBG is a biological living ecosystem, not just a plant,” explained an executive from BPCL. For every 10 tons of gas produced, the process generates approximately 25 tons of solid manure and 80 tons of liquid waste. Without a robust local market for this Fermented Organic Manure (FOM), plants can become “physically and financially clogged.”

Policy as a Catalyst
Recognizing these gaps, New Delhi has introduced a suite of viability gap funding measures. The Development of Pipeline Infrastructure (DPI) scheme now covers 50% of the cost of connecting plants to the national grid. Similarly, the Biomass Aggregation Machinery (BAM) scheme offers 50% subsidies for procuring collection equipment.

To shore up demand, the government has instituted a mandatory blending mandate, starting at 1% for FY 2025-26 and rising to 5% by FY 2028-29. There is also a push to formalize the by-product market, with a subsidy of Rs 1,500 per metric tonne for quality-tested organic manure.

The Road Ahead
Despite the slow start, industry leaders maintain a posture of realistic optimism. The consensus is that the vision requires a more cohesive national biogas mission to bridge the gap between local waste and the national gas station.

As Charlotte Morton of the World Biogas Association summarized: “The political will and ambition are there. What is required is a coordinated effort to bring everything together.” For India’s automotive sector, the success of that coordination will determine whether its gas-powered future is fueled by domestic waste or remains tethered to imported energy.

The Car that Exists Before it Exists

Anurag Chaturvedi — Thu, 05 Mar 2026 16:22:56

Across four vehicle development programmes, engines built by Jaguar Land Rover, Isuzu, Mahindra, and Sharda Motor Industries, engineers using the same simulation software cut development time by an average of 58% and reduced costs by 43%. Those are not projections. They are outcomes—documented across production programmes, on hardware that is on the road today.

The numbers deserve a moment because they reframe a question the automotive industry usually treats as an engineering one. It is a question of whether a manufacturer can afford not to, particularly in India, where development timelines are compressing and powertrain complexity is multiplying.

When Mahindra launched the BE 6 and XEV 9e last year, the vehicles had already survived a Rajasthan summer, climbed the Sahyadris, and cruised the Mumbai–Pune Expressway hundreds of times. Long before the first physical prototype was signed off, the company's engineering teams had run each of those scenarios virtually — testing how Indian heat, Indian gradients, and Indian traffic would affect range, battery performance, and thermal behaviour.

They then used those findings to shape the design itself. By the time a mule hit the tarmac, it was not discovering problems. It was confirming that a design already stress-tested in ways no proving ground could replicate — at speed or at scale — had held up. An earlier Mahindra programme developing a BS6 engine through the same platform had come in at 50% of its original development timeline and 40% below projected cost.

This is system simulation in practice.

What is simulation, and how is it different from ordinary CAD?

The automotive industry is familiar with CAD — Computer-Aided Design — which produces the geometry of a part or a vehicle. Simulation is a different discipline. Computer-Aided Engineering (CAE) tools model not what something looks like, but how it behaves under thermal stress, under electrical load, under the particular punishment of Indian roads, and across thousands of operating conditions simultaneously.

In a vehicle context, this means building mathematical models of individual systems, the battery pack, the thermal circuit, the engine, the HVAC, and integrating them so the software can solve their interactions together. What happens to cabin temperature when the battery is working hard on a 42-degree afternoon? How does that change the range calculation? How should the cooling circuit respond, and what does that response cost in energy?

These are not questions a CAD file can answer. A simulation model can — in minutes, not months, and without consuming a single physical part.

As Matthew Warner, Vice President at Gamma Technologies, put it at his company's annual technical conference in Pune this February: “The idea is to reuse that value you have in your CAE model to answer questions in other parts of the development organisation — controls, test, requirements engineering. One model that delivers consistent results regardless of the application.”

One source of truth, used everywhere. The 58% time saving, in large part, lives in that sentence.

Why the Urgency?

Three forces have converged to make simulation less of an engineering preference and more of a commercial necessity.

The first is powertrain complexity. The clean narrative of the green mobility transition has given way to something messier. OEMs are simultaneously developing battery EVs, hybrids, and updated internal combustion vehicles — not sequentially but in parallel across engineering teams. Each architecture demands its own simulation environment and its own validation loop. The workload has multiplied without a proportional expansion in headcount or timeline.

The second is the shrinking product cycle. “The cycle of product development has reduced significantly, from 3 to 5 years to now nearly 2 years,” said Dr N.H. Walke, Senior Director at ARAI, at the SIAT 2026 conclave in Pune, which drew a record 2,000-plus abstract submissions this year, with testing as its dominant theme. “Now it is concurrent engineering. Simulation, component development, and proving — all these tests have to happen simultaneously.”

A programme that could once afford to discover problems in sequence must now surface and resolve them in parallel. Isuzu Technical's commercial diesel programme, using the same simulation platform, cut dynamometer testing hours by 60% and costs by 45%, time that would otherwise have sat in physical test queues. Jaguar Land Rover's Ingenium 2.0L diesel programme achieved a 50% reduction in development cycle time and 35-40% cost savings.

The pattern is consistent enough across programmes to be structural rather than exceptional.

The third force is specifically Indian: the historical cost of proving vehicles abroad. For validation infrastructure that barely existed domestically, Indian OEMs travelled to European facilities — absorbing the time, the cost, and the strategic inconvenience of developing products calibrated to foreign conditions.

ARAI is closing the gap with domestic investment in crash labs, advanced battery test facilities, and ADAS proving grounds. Simulation compounds the value of that infrastructure by reducing the number of physical runs a validated design actually needs — which, in practical terms, also reduces how many flights an Indian engineering team needs to book to Stuttgart or Gaydon.

The market has priced the trajectory accordingly. Automotive simulation software was valued at $7.06 billion globally in 2025 and is projected to reach $24.35 billion by 2034, a CAGR of 14.75%, according to Precedence Research.

A Company that Saw this Coming in 1994

Gamma Technologies was founded in Illinois thirty-one years ago on a premise that was, at the time, contrarian. Most CAE vendors were building tools for single-physics, single-component analysis. GT's founders believed the more valuable problem was the system as a whole.

“Products do not exist in single physics domains — they exist as multi-physics systems,” says Dimple Shah, who has led the company as CEO since 2020 and has worked in CAE since 1991. “The underlying thesis was that with time, the complexity of systems would increase, and as complexity increases, it becomes important to understand the interdependencies of subsystems with each other.”

Thirty years later, that thesis is mainstream. GT-SUITE, Gamma's flagship platform, covers engine performance, battery electrochemistry, electric powertrain, thermal management, exhaust aftertreatment, fuel cells, and HVAC within a single integrated environment. Its user base spans every major global OEM; in India, it includes Tata Motors and Mahindra.

GTTC 2026 was the occasion to launch GT Intelligence Studio — an AI-native addition to the platform that layers generative AI and machine-learning meta-models onto the existing physics engine. The announcement raises an obvious question from engineers working in safety-critical systems: how do you trust an AI model when the output affects brake calibration or a battery management decision?

Shah's answer is grounded rather than promotional. “The quality of meta-models depends on the quality of the datasets they are trained on. Our meta-models are trained on physics data, which can also be augmented by data from external sources. Because a large part comes from physics itself, the trust in the model is high. One should not deploy meta-models blindly; just like any simulation model, you need confidence that it is applicable in the range you intend to deploy it.”

Warner adds context that matters: the machine learning component is not a new development. “We have had it in our software for almost 20 years. The usage of ML meta-models is often not deployed to an actual vehicle in operation. They are utilised within the development process of the vehicle, so in that use case they are not safety mission-critical.”

What is genuinely new is the generative AI layer and, more practically, the cloud platform GT-PLAY that places validated simulation models in the hands of engineers across an enterprise who are not simulation specialists, but control teams, test planners, and product managers.

India at par, with One Honest Caveat

The Mahindra presentation at GTTC 2026 showed what that looks like in practice, from an Indian engineering team operating at the front of the field.

On the BE 6 and XEV 9e programmes, the company's Vehicle Performance Simulation group ran integrated thermal modelling that quantified the range impact of India's climate extremes. Aerodynamic trade-off analysis mapped the relationship between drag coefficient, vehicle weight, and range across different feature configurations before a physical prototype carried any of them.

A pan-India virtual drive exercise mapped highway, ghat, and city profiles across the country's geographic zones, accounting for gradient, AC load, and regional speed distributions. The same team framed simulation as virtual calibration at the front end, battery health monitoring and predictive maintenance post-launch, and digital twins that give engineers objective data against which to audit subjective customer feedback from the field.

Shah's assessment of where Indian OEMs stand is precise: “Indian companies are truly aspirational. They are becoming very strong contenders on a global scale. At this conference, when I compare the quality of papers being presented by our community to our European, American, and Japanese conferences, I see no difference. The user community is at par.”

The caveat he offers is the right one to leave with. “Many global OEM companies look at technologies five to ten years out, building core expertise in-house. Some companies in India could do more of that. One area where India could do more is fundamental research. Today, they do it, but largely through partners and collaborators rather than in-house. That is going to be one of the key trends in the coming years.”

There is a clear distinction between using simulation tools at a world-class level and generating the foundational knowledge that shapes what those tools do next. The 58% and 43% figures were earned by engineering teams who knew how to run the software. The companies that will define the next version of that software are the ones building that knowledge in-house, ahead of the programmes that will need it.

Can Isobutanol Solve Diesel’s Dirty Emissions Secret?

Arunima Pal — Thu, 05 Mar 2026 14:16:04

The automotive industry's quest to decarbonize heavy-duty trucking consistently hits a wall: the stubborn efficiency of the diesel engine. While light-duty vehicles move toward electrification, the weight and range requirements of 19-ton trucks and long-haul freight make batteries a difficult sell. Amidst this struggle, isobutanol, a higher-order alcohol, is being hailed by industry insiders as a diesel-blending alternative that could bridge the gap, yet it remains conspicuously absent from commercial markets.

Isobutanol is produced using the same biological feedstocks as ethanol, rather than being a derivative of ethanol itself. These include grains, specifically maize or broken rice. Industry experts have proposed using sugarcane molasses-based feedstocks for pilot isobutanol plants to utilize excess sugar industry byproducts.

This development seems significant considering the diesel blending programme. This initiative, governed by India’s National Policy on Biofuels (NPB), was originally established in 2018 and subsequently amended in 2022. Its primary objective is to reduce the country’s heavy reliance on imported crude oil and lower emissions in the heavy-duty transport sector. The programme sets an indicative target of achieving 5% biodiesel blending in diesel by 2030. However, unlike the ethanol blending programme for gasoline, which reached its 20% target ahead of schedule, the biodiesel programme has struggled. Current blending levels are estimated at only 1% to 2%. The target has been missed frequently due to infrastructure and feedstock challenges, which include unused cooking oil, non-edible oilseeds, and fats, oils, and greases.

The issues surrounding the adoption of isobutanol were intensely debated at the recently held India Energy Week 2026 in Goa.

The Emissions Engine

Unlike ethanol, which is primarily blended into gasoline, isobutanol offers a chemical profile much closer to petroleum diesel. Recent trials suggest that when mixed with an emulsifier, isobutanol can drastically reduce emissions in heavy engines while simultaneously increasing fuel efficiency. This makes it a prime candidate for a "drop-in" fuel, one that doesn't require massive overhauls of existing supply chains.

However, the path from trial to tank is fraught with obstacles. Bharati Balaji, Director of the All India Distillers’ Association (AIDA), notes that while the potential is high, the market is still in its infancy. "Apparently, if you mix isobutanol with an emulsifier... emissions reduce drastically and engine efficiencies increase," Balaji stated, though cautioning that "it’s too nascent to give away anything" regarding commercial timelines.

The Swedish Paradox

The mystery of isobutanol lies in its successful, yet isolated pilot models. Sweden has long served as the global laboratory for isobutanol blending, proving its technical viability in real-world conditions. Despite these successful northern models, there isn't a single full-scale commercial isobutanol plant operating globally.

This lack of scale is often attributed to a "wait-and-see" approach from both governments and investors. While the technology is proven at the laboratory and pilot stages, the leap to a commercial-scale facility requires significant capital that hasn't yet been triggered by hard mandates.

Retrofitting the Myth

It is a common misconception that ethanol is converted into isobutanol; in reality, isobutanol cannot be made from ethanol. Instead, the production process is adjusted to produce isobutanol directly from the original raw material.

A central debate within the automotive fuel sector is whether existing ethanol distilleries, often called 1G plants (first-generation refineries that process corn or sugarcane), can be converted to produce isobutanol. Skeptics have called this a myth, citing the fundamental biochemical differences between ethanol and isobutanol fermentation.

Reality, however, may lie in a hybrid approach. Some energy majors are exploring retrofitting existing 1G facilities to produce both products simultaneously. Anshul Gupta, Senior Manager at BPCL, highlighted that their teams found that "if the 1G plant can be retrofitted rightly... one ton of the feed probably can produce some percentage of ethanol and some percentage of [isobutanol]." This dual-track production could resolve the issue by using the same feedstock to target both the gasoline and diesel markets.

BPCL has been working on isobutanol for the last two years. They recently conducted three months of successful trials using isobutanol in stationary engines (specifically mentioning Cummins engines), yielding clear results. To further prove the fuel's viability, BPCL has partnered with IIT and IIP (Indian Institute of Petroleum) for data validation. They are committing significant funding to test the fuel across 33 different vehicle types in India to monitor performance and blending stability. However, while technical progress is being made, oil marketing companies (OMCs) like BPCL cannot blend isobutanol beyond certain limits without a government mandate.

Even if the production issues are solved, the automotive industry faces a "chicken-and-egg" scenario. Manufacturers are hesitant to mass-produce isobutanol-compatible engines without a guaranteed fuel supply, while fuel producers won't scale up without confirmed demand. Without a mandate from oil marketing companies to ensure the fuel is available at the point of consumption, even ready-to-market technologies remain idle.

Support for Research and Piloting on the Cards?

The Indian government has indicated to the industry that if they can demonstrate the technical and commercial viability of producing isobutanol through minor tweaking and investment in existing ethanol plants, a formal policy framework, including potential subsidies, will follow. The International Energy Agency (IEA) has recommended that India provide financial support for the continued research, testing, and piloting of isobutanol to help meet diesel blending targets.

While not yet specific to isobutanol, several existing schemes for the ethanol industry are seen as potential vehicles for isobutanol production. The Scheme to Enhance Ethanol Distillation Capacity provides interest subventions (6% per annum or 50% of the bank rate) for retrofitting existing facilities. Since isobutanol can be produced by retrofitting first-generation (1G) ethanol plants, industry leaders are exploring this as a pathway to simultaneously produce both fuels.

Likewise, the Pradhan Mantri JI-VAN Yojana programme provides financial support for demonstration-scale and commercial-scale projects for new ethanol production pathways. Industry discussions suggest that higher-order alcohols like isobutanol could eventually fall under such innovation-focused funding if they leverage similar feedstocks and supply chains.

Way Forward

The future of isobutanol as a diesel saviour hinges on a delicate trifecta of regulatory certainty, technological intelligence, and infrastructure scaling. While successful pilots in Sweden and emerging retrofitting concepts in India suggest that the problems around isobutanol production are slowly being dismantled, the lack of a commercial-scale plant remains a glaring void in the green energy transition.

For the automotive industry, isobutanol offers a rare opportunity to clean up the dirtiest segments of transportation without abandoning the internal combustion engine. However, until governments provide the hard mandates necessary to unlock project financing, isobutanol will likely remain a phantom in the fuel tank — a high-potential solution that everyone talks about, but no one can buy.