India's Auto Market Shifts, Offering Comeback Chance for Global Players

As of August 2025, India's auto market has undergone a significant transformation, presenting a better environment for global automakers to make a comeback. According to Yogesh Aggarwal, Head of Research at HSBC India, past mistakes like "trying to force-fit global products in India" instead of adapting them can now be corrected.

The Indian auto market has shifted in multiple ways over the past few years. Powertrains have evolved from pure petrol and diesel to include electric and hybrid options, giving late entrants a "level playing field." Additionally, cars have become larger and more expensive, with average prices doubling to around ₹11-12 lakh over the last decade. Safety has also become a priority for buyers, and exports from India have grown, improving economic viability for smaller players.

However, market concentration remains high, with the top six OEMs capturing almost 94% of the market. Smaller players hold just a 6% share, making it challenging for new entrants to regain ground. But examples from other markets, such as Hyundai's success in the US and MG Motors' growth in the UK, suggest that market share gains are possible.

The demand outlook for 2025 remains muted, with the first quarter being weak and only a "bit of a green shoot" in July. Aggarwal expects flat to marginal growth this year, coming off a high base, but sees potential support from upcoming new launches. On penetration, he notes that India is "a story of market expansion" rather than low ownership, as most people who can afford a car already have one.