Witnessing manufacturing modernisation since Maruti Udyog began producing cars in collaboration with Suzuki of Japan at Gurgaon in 1984, the Indian auto industry landscape has drastically changed. Opening up to automation with the installation of some of the best robots available at Kuka, ABB and others, the auto industry has left no stone unturned. Such has been the fervor that Tal, a Tata Motors company, launched a robot called Brabo in 2018 to make manufacturing processes involving the application of sealants, picking and placing of parts, welding and vision inspection reliable and easy to perform. Made with an eye on manufacturing process the world over, the Brabo was tested in over 50 work streams and has so far found use in sectors like lighting, aerospace, software, electronics, plastics, education and logistics sectors apart from the auto industry. Coming from an auto maker that installed 300 Kuka robots to automate the assembly of Sumo and Safari at its Pune plant in 2009, the Brabo has seen many rounds of development and application-preparedness since its launch.                

Smart manufacturing trend

Highlighting the smart manufacturing trend, the TAL Brabo robot with payloads of two and 10 kilos has also found favour with companies in Europe and other places. Highlighting the prowess of Artificial Intelligence (AI) and Internet of Things (IoT), the robot is an example of the fast-changing manufacturing canvas. Producing about 1,286 engines per day, the Igatpuri plant of Mahindra & Mahindra became India's first carbon-neutral manufacturing facility by adopting smart manufacturing practices under Industry 4.0 in 2019. It invested in energy efficient technologies among others. It invested in recycling of water and other waste. It invested in solar panels to power some of its processes in the plant. An industry source expressed that the rapidly changing business environment the world over is providing impetus to smart manufacturing. It is driving efficiency enhancements and collaborations, he added. Emphasising on efficiency enhancements and collaborative efforts as key smart manufacturing drivers, an industry expert stated that technologies like AI, Industrial Internet of Things (IIoT), automation, big data and 5G are the biggest triggers. They are touching every aspect of manufacturing, from sourcing of raw materials to final inspection, he quipped.  

Industry 4.0

As companies like Lincode (it has collaborated with Switzerland-based Global Automotive Alliance), specialising in AI-powered visual inspection with multiple patent-pending defect detection capabilities, find more and more takers in India, the smart manufacturing shift is continuing to take place despite disruptions. It has, in fact, gained speed in India with the race to successfully accomplish BS VI transition in the last few years. A source in the auto industry mentioned that BS VI transition led to manufacturers upping their global ambitions. Vinay Raghunath, Partner and Leader, Automotive Sector, EY India, averred in a report that automotive shop floors are evolving and adopting digital technologies. This, he added, is happening amid challenges like slowdown in demand, non-availability of labour, concerns on health and safety management on the shop floor. Witnessing disruptions relating to ROI among other factors, as Raghunath has informed, the Indian auto industry has been an early adopter of digital manufacturing techniques.  

Working to dial higher efficiency, expertise and superior productivity, the Indian auto industry has been overhauling existing assembly lines, erecting new ones and extensively re-evaluating its manufacturing processes and practices in view of smart manufacturing, especially from an automotive value chain point of view. Taking to Industry 4.0, it is leveraging AI and IoT-based manufacturing technologies to automate further – to engage in machine-to-machine communication (M2M) such that there is self-monitoring as well as self-diagnosing. Taking to Industry 4.0 to tackle unanticipated disruptions like the Covid-19 pandemic, which has put well-oiled supply chains and production lines to the test and made it painfully clear that they in their current form are not as agile or resilient as expected, the auto industry is shifting to smart manufacturing in a big way. It is exploring and experimenting; it is finding new ways. It is doing so as it absorbs a significant change in technologies and products like electrification and EVs.

Operator 4.0 and hyper-intelligence

Investing heavily in data analytics infrastructure and capabilities, the auto industry is leveraging opportunities to digitally transform itself. It is defining the boundaries of physics for data-driven model. It is focusing on digital skills development. It is supporting the rise of Operator 4.0. Taking to collaborative robots that coexist with humans in a workplace, it is transforming its ways of manufacturing significantly. Drawing attention to the semi-conductor shortage and how the auto industry was affected despite using only 10 percent of the production, Vipin Sondhi, Managing Director, Ashok Leyland, explained that the rapidly changing consumer psyche is dictating a move to a completely different technological aspect. Emphasising on material technology, he said smart manufacturing is about digitising and achieving cost competitiveness. It was some two to three years ago that the Chennai-based CV maker began implementing smart manufacturing technologies to mitigate challenges. It took to modernising and digitising existing workplaces to address quality issues that are difficult for human beings to detect and acquire made-to-order or mass customisation capabilities. It took to equipping itself with an ability to expand and contract in tandem with the market conditions even as it took to modularisation of product lines.  

Automating its cab panel pressing plant at Hosur in 2019, which increased the output by up to 66 percent, Ashok Leyland has been one of the many automotive OEMs globally that are investing in hyper-intelligent automation. A confluence of AI and Robotic Process Automation (RPA), hyper-intelligent automation is redefining not just Industry 4.0 but also Operator 4.0. It is facing challenges like the high initial acquisition cost in terms of tools, but that isn’t worrying players involved like Tata Consultancy Services, Wipro, Mitsubishi Electric Corporation, Catalytic Inc and Infosys Limited among others. Estimated to grow at a CAGR of 18.9 percent as manufacturers strive to reduce energy consumption, up quality and reliability, and control costs through predictability and data-driven unique insights, hyper-intelligent automation is turning out to be yet another finer aspect of smart manufacturing. It is proving to be a big enabler for automating repetitive tasks – to enhance efficiencies, to take to cloud computing to ensure significantly more flexibility and to achieve scalability and the ability to collaborate and reduce costs.

Increasing visibility, predictability and enhancing control on operations and inventory, hyper-intelligent automation is aiding effective decision-making. Supported by development of new technologies such as 5G, which according to a domain expert, promises the need for speed and flexibility along with the capability to eliminate network instability or downtime, hyper-intelligent automation is helping automotive suppliers like Rane Madras Limited to make efficiency, reliability and cost control gains. In 2018, the company adopted automated solutions of Mistubishi Electric Corporation for its new plant in Gujarat. It led to a significant decrease in energy consumption. Aiding smart manufacturing, technologies like hyper-intelligent automation and 5G are helping the auto industry to achieve resilience and immunity against future uncertainties. They are helping to integrate Information Technology (IT) systems used for data-centric computing with Operational Technology (OT) systems – for data readiness and cyber security, and for the development of digital talent. Technologies like hyper-intelligent automation and 5G are helping to develop cross-functional profiles like engineering-manufacturing, manufacturing-maintenance and safety-security.

Tackling disruptions and smart working environment

Looking at productivity gains, emerging competition and risk aversity in the globalised world as per the EY report, the auto industry is taking to smart manufacturing to achieve significant technology transformations like electromobility as well. Apart from the creation of a smart working environment, it is also looking at the use of new materials, new process guidelines and practices. With health also becoming a disruptive factor in recent times, the auto industry is looking at automation in processes like inbound logistics, production planning, sourcing, press shop, body shop, paint shop, quality control and outbound logistics through data visualisation. With sensors and analytics shaping up, the smart working environment in a factory is coming to include AI-based alerts and fully automated work floors. This is increasingly getting compounded by data collection, historical data and high-quality extensive data mining. Helping to guarantee ROI, smart manufacturing is helping to lower the ‘takt’ time. It is also ironically undermining the involvement of humans on the shop floor.   

Reducing the cost of computation, storage and connectivity, smart manufacturing is coming of age with plummeting prices of sensors, 3D printers and robots. Empowering cloud-based manufacturing techniques and a gradual increase in the understanding of emerging technologies, smart manufacturing is providing an advantage in terms of the ability to respond to market changes quickly. Taking to develop a new light-duty truck platform with export ambitions and flexibility in terms of left-hand drive and right-hand drive orientation, VE Commercial Vehicles Ltd took to automating its welding line with robots at its Pithampur plant. It also took to robotising its windshield pasting station among others. Experiencing quality, consistency, efficiency and cost gains, the CV maker is also known to have reduced the takt time and energy consumption. As global ambitions and modularity strike in view of the ability to explore new export markets with a cost competitive BS VI product, the auto industry in India is using embedded sensors, RFID and GPS etc. for smart tracking. It is using smart manufacturing technologies to monitor parameters like temperature, pressure, vibration, machine rpm and flow rate.

Smart flexibility

As part of a shift to smart manufacturing, automakers and suppliers are resorting to flexible manufacturing and AR-based solutions to upskill. They are, in view of the technologies like connected vehicles and EVs, stressing on re-aligning their traditional manufacturing setups with that of the future. Emphasising on quality, resource optimisation, streamlining of business processes and adoption of new emerging technologies, they are closely evaluating the advantages of solutions like digital twins and rapid prototyping using additive manufacturing offer. With ROI on their mind, they are embracing smart manufacturing to move up the value chain.

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Hyderabad-headquartered electric vehicle company Olectra Greentech has launched a new brand identity and tagline, ‘Transforming Everyday’. The update marks the company’s transition from a specialist bus manufacturer to an organisation providing integrated mobility and energy solutions.

The brand repositioning is built upon three operational pillars intended to guide product development and market engagement:

• Pragmatic Futurism: Developing platforms for real-world conditions.
• Accessible Innovation: Ensuring technology remains scalable and usable.
• Trusted Guide: Establishing the company as a partner within the electric vehicle (EV) ecosystem.

The mission statement accompanying the refresh focuses on delivering innovation and execution excellence to create value for stakeholders in the mobility and energy sectors.

The updated visual language reinterprets existing company elements – the Olectra Prism – a central triangle representing structural integrity and direction. The Olectra Universe – a surrounding circle symbolising the ecosystem of stakeholders, infrastructure and cities.

Olectra currently operates with a portfolio that has expanded to include electric trucks and tippers alongside its established bus manufacturing division. The company maintains a manufacturing pipeline primarily serving government sectors.

Mahesh Babu, Managing Director, Olectra Greentech, said, “Olectra’s new brand identity is not just a visual change – it represents our ambition, mindset and the direction we are heading. It ensures that our brand, organisation and long-term strategy are aligned. As we transform from a pioneering electric bus manufacturer to a future-ready, innovation-led organisation delivering integrated mobility and energy solutions, this new identity reflects our core values and our commitment to ‘Transforming Everyday’ across the mobility and energy ecosystem.”

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Astranova Mobility, an electric vehicle (EV) financing and asset management platform, has raised INR 600 million in a Series A equity funding round. The investment was led by IvyCap Ventures, with participation from existing investors Asian Development Bank and Advantedge Founders, as well as Silicon Valley-based Trucks Venture Capital.

Founded in 2023 by Kunal Mundra and Grip Invest, Astranova Mobility provides financing and operational services for commercial electric vehicles. The company’s portfolio includes two-wheelers, cars, buses and heavy-duty trucks. To date, the platform has enabled the deployment of over 25,000 EVs with an asset value exceeding INR 3.6 billion.

The company’s "full-stack" platform includes EV financing and leasing, asset selection and maintenance, proprietary data and technology dashboards, and operational support.

The capital will be used to enhance the company's data, AI, and engineering capabilities. Astranova aims to increase its scale fivefold over the next 18 months, with a long-term goal of enabling USD 1 billion in EV deployments over the next four years. The partnership with Trucks VC is intended to provide access to technical expertise from the United States automotive technology ecosystem.

Kunal Mundra, Founder and CEO, Astranova Mobility, said, “We are delighted to welcome IvyCap Ventures as a partner on this journey. Their deep experience and strong track record in the Indian startup ecosystem, combined with best-in-class access to institutional capital and engineering capabilities through institutions such as the IITs, will be a key differentiator for Astranova. With this fund raise, we have simultaneously unlocked significant debt capital and are now all set to grow over 5x in the next 18 months which will create a strong foundation for us to enable the deployment of USD 1 Bn EVs in the next 4 years and accelerate India’s transition to net zero.”

Vikram Gupta, Founder and Managing Partner, IvyCap Ventures, added, “Astranova Mobility is a strong enabler of India’s clean mobility transition, combining data-driven insights, financing strength, and deep sector expertise. Their rapid execution and clear vision for the commercial EV segment position them well to scale sustainable transportation nationally. We’re delighted to partner with them on this journey.”

Puneeth Meruva, Partner at Trucks Venture Capital, commented, “India’s transition to commercial electric vehicles will require over USD 100 billion in financing. Yet, traditional lenders lack the expertise to underwrite EV assets, while small fleet operators remain underserved due to limited credit access. Astranova addresses this gap through a data-first, full-stack platform spanning leasing, asset management, and maintenance.”

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German luxury brand BMW Group India has recorded its highest-ever Q1 sales, delivering 4,567 cars in the first three months of CY2026. This represents a 17 percent YoY increase, with every month in the quarter achieving record performance levels.

The Group maintains a 70 percent market share in the Indian luxury electric vehicle (EV) segment. In Q1, the company sold 1,185 BMW and MINI EVs, marking an 83 percent YoY growth. Currently, 1 in 4 vehicles sold by BMW in India is an electric model, with EV penetration reaching 26 percent of total sales.

The company’s electric portfolio includes 6 cars and 2 scooters, supported by a network of over 6,000 charging points nationwide. Initiatives such as Destination Charging and Smart E-Routing have been implemented to support the transition to luxury electric mobility.

As per the luxury brand, it observed growth across several specific vehicle categories:

• Long Wheelbase (LWB) Range: LWB models accounted for over 50 percent of total sales, with 2,256 units delivered, which marks 23 percent YoY increase.
• Sports Activity Vehicles (SAV) segment grew by 38 percent YoY, totalling 2,966 units and representing 65 percent of the group's car sales.
• MINI: The brand delivered 213 units, achieving 42 percent growth.
• BMW Motorrad: The motorcycle division delivered 1,216 units, led by demand for the G 310, S 1000 and GS series.

BMW Group India has planned 27 product launches for 2026, covering all-new models, facelifts and limited editions. Four models were introduced in Q1, including the BMW M2 CS and BMW X3 30, with a further eight launches scheduled for the second quarter.

Under its Retail.NEXT strategy, the group plans to expand its presence by adding 19 outlets across 18 cities this year. The current network comprises 97 touchpoints in 40 cities. Additionally, BMW India Financial Services financed 25 percent of the vehicles sold in Q1, offering products with assured buy-back values of up to 74 percent.

Hardeep Singh Brar, President and CEO, BMW Group India, said, “BMW Group India has entered 2026 in an extremely strong position. We have achieved our highest-ever Q1 sales, registering solid double-digit growth, despite macroeconomic and geopolitical headwinds. Our lead in India’s luxury electric mobility also continues thanks to the immense trust our valued customers have put in our electric offerings in terms of performance, EV ecosystem and technology. We are geared to a pulsating 2026 that will be marked by our most ambitious product offensive, with 4 already launched and 23 more to go. Sustaining this momentum into long-term success, our unwavering focus on customer experience, aftersales and brand connect will be taken to the next level. With each new car, we aim to deliver JOY to our customers who enable this success story for BMW Group India.”

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The Indian automotive retail sales has grown 13 percent YoY with 29.6 million vehicles sold across segments in FY2026, as compared to 26.1 million units a year ago. Barring the construction equipment segment (-12 percent YoY), all segments clocked a healthy double-digit growth as per the latest data shared by the Federation of Automobile Dealers Association (FADA India).

Sales data for March 2026 points out to a robust 25.28 percent YoY growth with 2.69 million vehicles sold, as compared to 2.14 million units sold a year ago. The growth was seen across the two-wheeler segment (+28.69 percent YoY), three-wheelers (+10.52 percent YoY), passenger vehicle (+21.48 percent YoY), tractor (+10.87 percent YoY) and commercial vehicle (+15.12 percent YoY).

On the other hand, the e-rickshaw (passenger) and construction equipment industry reported a negative growth of 19.73 percent YoY and 16.17 percent YoY, respectively.

For FY2026, the two-wheeler sales came at 21.4 million units, an uptick of 13 percent YoY, as compared to 18.8 million units sold a year ago. Three-wheeler sales came at 1.36 million, up 12 percent YoY, as compared to 1.22 million units sold a year ago.

Interestingly, passenger vehicle sales grew by 13 percent YoY with 4.7 million units sold, as compared to 4.16 million units sold in FY2025. The tractor industry surpassed 1 million units with 1.05 million sold up 19 percent YoY, as compared to 882,825 units sold last year.  

C S Vigneshwar, President, FADA, said: “FY 2025-26 has been a landmark year for Indian auto retail — delivering an all-time high of 2,96,71,064 units with a broad-based 13.30 percent YoY growth that saw 5 of 6 vehicle categories set new annual records. This is not just a number — it represents the industry approaching the 3-crore mark, a milestone that would have seemed distant just two years ago. What makes this year particularly significant is that the growth was structurally sound, underpinned by improving affordability, widening mobility demand across urban and rural India, and a diversifying powertrain mix.”

He further pointed out that the sales performance for the year was not linear. “The first five months (April through August) were a period of measured momentum, with monthly growth ranging between 2 percent and 5 percent as the market navigated residual caution from the previous year’s sluggish inventory cycle, selective financing constraints and consumer wait-and-watch behaviour in anticipation of policy clarity. During this phase, enquiries remained tentative, conversions stayed uneven and the dealer community exercised understandable restraint,” he explained.

GST Rationalisation 

The FADA president highlights that the turning point arrived in September with the implementation of GST 2.0, which meaningfully reduced the effective tax burden on mass-segment two-wheelers, small cars, three-wheelers and select commercial categories – improved real affordability at a time when the consumer was already positioned to respond.

“From September onwards, we witnessed a clear inflection: the festive convergence of Navratri and Diwali in October delivered an all-time record monthly retail of over 4 million units, and the momentum carried through the remainder of the year. January, February, and March 2026 each registered strong double-digit YoY growth, validating that the upshift was not merely festive but structural,” he said.

The retail sales highlights in FY2026 for the automotive industry include – two-wheeler retails reaching pre-pandemic peaks. Passenger vehicles crossed the 4.7-million mark for the first time, growing by 13 percent. This was supported by a shift towards SUVs and alternative powertrains.

Tractor sales at record high surpassing million-unit mark for the first time due to a strong monsoon and improved farm economics.

Commercial vehicles too surpassed the million-unit mark with 11.74 percent growth, led by infrastructure demand.

Three-wheelers set a third consecutive annual record with 11.68 percent growth, where electric vehicle (EV) penetration now exceeds 60 percent.

The shift towards cleaner energy deepened throughout the year. Total EV retails reached 2.45 million units, a 24.63 percent expansion. EV market share rose to 6.54 percent in two-wheelers and 4.25 percent in passenger vehicles. CNG also strengthened its position, accounting for 21.98 percent of PV sales.

Inventory management for passenger vehicles improved, with stock levels correcting from over 50 days to approximately 28 days by March 2026. This healthily aligns wholesale dispatches with actual ground demand.

Outlook and Risks

The auto retailer body has maintained a cautiously positive outlook for FY2027, with 74.72 percent of dealers expecting growth for the full year. However, the industry is monitoring risks including the geopolitical situation in West Asia, which has caused supply disruptions for 53.2 percent of dealers. Rising fuel prices and potential logistics delays remain primary concerns for the near term.

FADA hence remains constructively cautious — structurally optimistic but operationally watchful for the next three months.

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