The growing push for electric mobility, particularly in the sub-INR 2 million PV EV category, is expected to drive significant growth, as manufacturers look to scale up EV production.The Bharat Mobility Show 2025 highlighted the auto industry’s shift toward EVs and clean fuels, with manufacturers across both passenger vehicles (PVs) and two-wheelers (2Ws) aligning with the upcoming Corporate Average Fuel Economy (CAFÉ) regulations.
The emphasis was on the adoption of sustainable mobility solutions, signaling the broader industry transition toward electrification and alternative fuels.
The passenger vehicle segment saw a dominant focus on EVs, with fewer internal combustion engine (ICE) launches.
The growing push for electric mobility, particularly in the sub-INR 2 million PV EV category, is expected to drive significant growth, as manufacturers look to scale up EV production.
The two-wheeler segment also witnessed a surge in electric vehicle launches, with established players entering the market, which further signifies the industry’s commitment to clean mobility solutions.
While the transition to EVs remains a key trend, the market still faces challenges, including sluggish demand in the near term. Despite a strong push for EV adoption, overall demand in the PV segment is expected to grow modestly, with rural demand and targeted discounting providing some support.
However, sales in southern regions are expected to remain weak. In the two-wheeler segment, sales growth is expected to be driven by steady rural demand, although new launches have not yet substantially boosted demand across the segment.
In the commercial vehicle (CV) space, demand remains subdued, with slight growth expected in replacement vehicles. The bus segment is expected to see stronger growth, while tractor sales may rise due to improved non-agri demand in certain regions.
Overall, the CV market is unlikely to see significant growth in the near term, although targeted investments in infrastructure could bolster long-term prospects.
The long term outlook for the Indian auto sector is optimistic, driven by increasing consumer demand, shift toward electrification, government support and ongoing EV infrastructure development.
Investments in rural development and job creation will stimulate economic activity and increase disposable income, providing a boost to demand across various vehicle categories.
Tax reforms that benefit the middle class will further fuel consumption, opening new opportunities for market expansion in both essential and aspirational segments. As consumer adoption of clean mobility solutions strengthens, auto manufacturers and suppliers aligned with EV components are well-positioned to benefit from the sector's growth.
The Bharat Mobility Show 2025 highlighted the auto industry’s shift toward EVs and clean fuels, with manufacturers across both passenger vehicles (PVs) and two-wheelers (2Ws) aligning with the upcoming Corporate Average Fuel Economy (CAFÉ) regulations.
The emphasis was on the adoption of sustainable mobility solutions, signaling the broader industry transition toward electrification and alternative fuels.
The passenger vehicle segment saw a dominant focus on EVs, with fewer internal combustion engine (ICE) launches. The growing push for electric mobility, particularly in the sub-INR 2 million PV EV category, is expected to drive significant growth, as manufacturers look to scale up EV production.
The two-wheeler segment also witnessed a surge in electric vehicle launches, with established players entering the market, which further signifies the industry’s commitment to clean mobility solutions.
While the transition to EVs remains a key trend, the market still faces challenges, including sluggish demand in the near term.
Despite a strong push for EV adoption, overall demand in the PV segment is expected to grow modestly, with rural demand and targeted discounting providing some support. However, sales in southern regions are expected to remain weak.
In the two-wheeler segment, sales growth is expected to be driven by steady rural demand, although new launches have not yet substantially boosted demand across the segment.
In the commercial vehicle (CV) space, demand remains subdued, with slight growth expected in replacement vehicles.
The bus segment is expected to see stronger growth, while tractor sales may rise due to improved non-agri demand in certain regions. Overall, the CV market is unlikely to see significant growth in the near term, although targeted investments in infrastructure could bolster long-term prospects.
The long term outlook for the Indian auto sector is optimistic, driven by increasing consumer demand, shift toward electrification, government support and ongoing EV infrastructure development.
Investments in rural development and job creation will stimulate economic activity and increase disposable income, providing a boost to demand across various vehicle categories.
Tax reforms that benefit the middle class will further fuel consumption, opening new opportunities for market expansion in both essential and aspirational segments.
As consumer adoption of clean mobility solutions strengthens, auto manufacturers and suppliers aligned with EV components are well-positioned to benefit from the sector's growth.
Maruti Suzuki:
MSIL posted an in-line 3QFY25 performance, with revenue/EBITDA/PAT up ~16%/14%/13% YoY to INR384.9b/44.7b/35.3b. Despite higher marketing costs and discounts, margin dilution in Q3 was limited to 30bps QoQ due to lower input costs and operating leverage.
Retail sales grew ~8% YoY, led by rural markets. MSIL is set to become India's No. 1 EV OEM by production with e-Vitara’s launch. We expect an 11% earnings CAGR over FY24-27E, driven by EVs, hybrids, and SUVs.
Hero MotorCorp:
Hero MotoCorp is poised for strong growth with a volume CAGR of 7.5% over FY25-27, driven by new launches across its 125cc, scooter, and premium segments, alongside a ramp-up in exports.
The company is seeing strong festive demand and expects continued momentum from the ongoing marriage season and rural recovery. Additionally, its investment in EVs, with Vida’s market share increasing to 5.4%, positions it well for long-term growth.
Revenue, EBITDA, and PAT are expected to grow at a CAGR of 9.5%, 9%, and 11%, respectively, over FY25-27.
