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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Kia Connect has named Olivier Pascal as President and Chief Executive Officer with effect from 1 January 2026. He brings over 15 years of automotive industry expertise to the position, having most recently acted as General Manager of Connected Cars, where he led European initiatives for connected vehicle experiences and data development. His career includes leadership across engineering, sales, marketing and technology functions at various dealership, regional and global levels. In his new capacity, Pascal will oversee the company’s connectivity, digital, data and charging strategies, emphasising customer experience, innovation and sustainable growth throughout Europe.

This leadership transition sees Marc Hedrich and Pablo Martínez Masip departing from their positions as President & CEO and COO, respectively. During their tenure, they were instrumental in driving strategic and operational performance across European markets. Hedrich moves to the role of President for Kia France, while Martínez Masip continues as Vice President of Product and Marketing at Kia Europe.

Kia Connect is dedicated to enhancing the customer journey through a fully integrated digital ecosystem, which now supports nearly two million users. The platform combines connected car services, digital mobility solutions and charging infrastructure, aligning with Kia’s broader shift towards software-defined and electrified mobility. Central to this ecosystem is the Kia App, launched last May, which consolidates connectivity, charging and ownership services into one interface. The app provides features such as remote status checks, vehicle diagnostics and charging control, with regular over-the-air updates introducing continual improvements informed by user feedback.

A recent December update introduced a 3D visualisation feature for the EV9 model, allowing drivers to view an accurate digital representation of their own vehicle’s configuration, including exterior colour and wheel design. This addition aims to create a more intuitive and tangible connection between the driver and their car through the app. Following an evaluation period, Kia intends to extend this 3D visualisation to other electric vehicle models in 2026.

Pascal said, “Kia Connect’s mission is to make every driving and charging journey smarter, safer, more convenient and more personal. In 2026, we will deliver tangible value for our B2C and B2B customers and partners, higher-quality features, a truly personalised digital experience, scalable B2B services and a robust charging solution. By combining innovation, unique customer experiences, responsible data use and operational rigour, we will build sustainable growth and a platform that supports Kia brand differentiation and business success in Europe.”

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Caterham and Motul have solidified their ongoing collaboration with a new long-term agreement, blending Caterham’s focus on lightweight sports cars with Motul’s extensive expertise in advanced lubrication, honed over more than a century and a half. The alliance was celebrated publicly at Rétromobile 2026 in Paris, where a 2005 K-Series and a 2025 Super Seven 2000 were displayed on Motul’s stand. Under the renewed partnership, every new Caterham Seven produced at the company’s Dartford headquarters will leave the factory using Motul lubricants, spanning all models from the road-going 170 to each race car competing in the five Caterham Motorsport UK Championships.

Further deepening the relationship, Motul will take on the role of title sponsor for the Caterham Seven Championship UK in 2026, the brand’s premier national racing series. Known globally for its high-performance, motorsport-oriented fluid solutions, Motul brings decades of experience supporting automotive reliability and competitive success. Its technical innovation and research capabilities, proven through partnerships with major events like the 24 Hours of Le Mans and the Dakar Rally, ensure that its products meet the most demanding requirements, making Motul a natural and strategic partner for Caterham’s engineering and racing ambitions.

Ali McColl, Global Head of Marketing, Caterham, said, “This partnership is a significant milestone for Caterham, aligning our brand with a world-renowned leader in lubricants and fluid technology, reinforcing our commitment to performance across both our road and race cars. Motul brings a depth of experience in performance and efficiency that few other partners can offer. This agreement also marks an exciting new chapter for Caterham Motorsport. As we look ahead to the 2026 season, we are proud to unveil the Motul Caterham Seven Championship UK as the new name for the pinnacle of Caterham racing in the UK.”

Andreea Culcea, Chief Brand & Communication Officer, Motul, said, “We are proud to renew our partnership with Caterham, a brand renowned for its exceptional sports car expertise. Since 2019, our collaboration has been driven by shared values of performance, craft and precision. At Motul, we are developing tailor-made solutions designed to unlock the full potential of our partners’ machines. Working alongside a manufacturer like Caterham, where hand-crafted, limited-production cars are born from deep engineering know-how and passion, reflects our vision of authentic partnerships.”

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The Indian automotive industry has commenced the 2026 calendar year on a high note, with automakers across two-wheeler, passenger vehicle and commercial vehicle segments reporting significant YoY wholesale growth for January. The performance reflects a resilient domestic market and a burgeoning recovery in international exports.

The two-wheeler sector saw massive volume gains, spearheaded by Hero MotoCorp, which recorded dispatches of 557,871 units, marking a robust 26 percent growth compared to 442,873 units in January 2025. This performance marks the company’s 25th consecutive year of market leadership. TVS Motor Company followed with a 30 percent increase in domestic two-wheeler sales, reaching 383,262 units, while its electric vehicle (EV) wing grew by 50 percent to 37,756 units.

Royal Enfield achieved a significant milestone, surpassing 1 million year-to-date sales in just 10 months, posting January sales of 104,322 motorcycles – a 14 percent YoY increase, which includes 93,781 units in the domestic market and 10,541 units exported.

B. Govindarajan, Managing Director, Eicher Motors and CEO, Royal Enfield, said, "The new year has begun on a positive note for Royal Enfield – extending the strong momentum from the previous quarter and marking four consecutive months of healthy double-digit growth. We have crossed 1 million motorcycle sales in this financial year across the globe and also crossed 100,000 motorcycle sales in exports."

In the passenger vehicle (PV) segment, Mahindra & Mahindra reported a 25 percent growth in utility vehicles, selling 63,510 units domestically. Tata Motors Passenger Vehicles saw a dramatic 47.1 percent rise in total sales (including EVs) to 71,066 units.

Hyundai Motor India achieved its highest-ever monthly domestic sales of 59,107 units, up 9.5 percent, while Toyota Kirloskar Motor registered 30,630 units, representing a 17 percent YoY growth. Kia India also started the year strong with 27,603 units, a 10.3 percent increase and JSW MG Motor India grew 9 percent with 4,843 wholesale units.

Honda Cars India reported domestic wholesales of 6,193 units and 748 units in exports. These figures follow a January 2025 performance where the company registered 7,325 domestic units and 4,979 units in exports.

The current sales volume is supported by demand for the Honda Amaze, alongside steady contributions from the City and Elevate models.

Tarun Garg, MD & CEO, Hyundai Motor India, said, "January 2026 marks a defining chapter in Hyundai Motor India’s journey. Achieving our highest-ever monthly domestic sales of 59,107 units... reflects not only Hyundai’s brand leadership but also the collective strength of our people, partners and customers."

Nalinikanth Gollagunta, CEO, Automotive Division, Mahindra & Mahindra, said, "Building on the strong momentum of last year's performance, we began the year on a strong note in January... On 14th January, we opened bookings for XUV7XO and XEV 9S clocking 93,689 bookings for a booking value of INR 205 billion - a record-breaking milestone in just 4 hours."

Atul Sood, Senior Vice-President, Sales & Marketing, Kia India, said, "The encouraging start to 2026 reflects the continued trust customers place in the Kia brand. The positive response to the new-generation Seltos, steady demand for the Sonet, and growing popularity of the Carens Clavis and Clavis EV, underline the strength and balance of our portfolio."

Kunal Behl, Vice President, Marketing & Sales, Honda Cars India Ltd, said: “The year has begun on a strong note, supported by a healthy sales momentum. The Honda Amaze continues to bring in strong demand for its value for money offering along with the City and Elevate that contribute steadily to the overall business. We remain confident of sustaining this positive momentum in the coming months.”

The commercial vehicle (CV) sector also demonstrated strength, particularly in heavy and light cargo segments. Tata Motors reported total CV sales of 38,844 units, up 29.1 percent from 30,083 units in the previous year. Within this, Heavy Commercial Vehicle (HCV) trucks saw the sharpest rise at 41.2 percent. Mahindra’s domestic CV sales grew by 22 percent to 27,656 units, driven largely by the LCV 2T–3.5T category.

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In a strategic pivot from direct consumer subsidies to foundational supply-chain resilience, the 2026-27 Union Budget, presented by Finance Minister Nirmala Sitharaman, focuses on bolstering the structural integrity of the Indian automobile industry.

A cornerstone of this year’s fiscal policy is the massive infrastructure and logistics push, highlighted by the development of the Dankuni-Surat Dedicated Freight Corridor and the operationalisation of 20 new national waterways. These initiatives, alongside a coastal cargo promotion scheme aiming to double the share of waterway freight to 12 percent by 2047, are designed to drastically lower logistics costs and ease the movement of components across the country.

Simultaneously, the government is reinforcing the industry's backbone by establishing a INR 100 billion SME Growth Fund to provide long-term capital for auto-component MSMEs, while enhancing liquidity through the Trade Receivables Discounting System (TReDS) and easing regulatory hurdles via ‘Corporate Mitras’ in Tier-II and Tier-III cities.

To secure the future of high-tech mobility, the Budget further expands the India Semiconductor Mission (ISM 2.0) to include domestic equipment manufacturing and chip IP, while nearly doubling the allocation for the Electronics Components Manufacturing Scheme to INR 400 billion. This technological drive is matched by a robust commitment to the electric vehicle (EV) ecosystem, specifically through the creation of ‘rare earth corridors’ in Odisha, Kerala, Andhra Pradesh and Tamil Nadu. These hubs will provide plug-and-play ecosystems to insulate the industry from global mineral volatility and supply curbs. Complementing this is a series of customs duty exemptions on capital goods used for lithium-ion cell manufacturing and critical mineral processing, which is expected to drive down battery costs and encourage local gigafactory expansion. Finally, for the clean energy segment, the full excise duty exemption on the biogas portion of blended CNG offers immediate relief to fuel prices, marking a comprehensive effort to foster a self-reliant, sustainable, and cost-competitive automotive landscape in the wake of previous GST reforms.

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