Japanese carmakers deepen hold in India with hybrids
Hello, I am Priyanka Salve, writing to you from Singapore.
Welcome to the latest edition “in india“ — Your one-stop source for stories and developments from the world’s fastest-growing major economy.
Indian consumers’ desire to move away from petrol cars should have been Tesla and BYD’s moment to shine in the world’s third-largest auto market. But legacy automakers, which have dominated the Indian market for decades, have a trump card: Hybrid cars.
Entertainment!
Have an opinion on today’s newsletter? share them with the team.
big story
hybrid cars Expected to reach 10% of total automobile sales in India According to a report by Indian research company Care Ratings, the share of electric vehicles is expected to be 5% in the fiscal year ending March 2027.
Puneet Gupta, director of S&P Global Mobility focusing on the Indian market, told CNBC that cost-conscious consumers who previously bought diesel vehicles have started to switch to hybrid vehicles.
Hybrid vehicle sales increased 4 times third largest in the world According to Care Ratings, the auto market grew from 98,010 units in the fiscal year ending March 2020 to 362,866 units in the fiscal year ending March 2026.
Meanwhile, the report based on vehicle registration data from the Indian government showed annual sales of electric vehicles by March 2026 at 131,865 units.
“It’s clear that hybrid cars are gaining traction [in India] Diwakar Murugan, Omdia’s senior automotive analyst, said in an email to CNBC: He added that it is “remarkable” that hybrids are punching above their weight, achieving strong growth with only eight models on the market so far, compared to more than 40 EV models.
The move away from internal combustion engines or internal combustion engine vehicles should have launched global EV companies into: Tesla’s And BYD But it turns out that Japanese manufacturers, who already dominate India’s automotive space, are ready to deepen their dominance in the market by offering hybrid cars instead of pure EVs.
Tesla has sold less than 400 cars in India since 2025, while BYD has sold less than 7,000 cars in India. According to government data.
Even in the EV space, automakers Mahindra and Mahindra And Tata MotorsThey are the leading players, mainly selling ICE cars. This is in stark contrast to the global dominance of BYD and Tesla: in 2025, BYD will be the world’s top EV seller with 2.26 million units, while Tesla sold 1.64 million units.
The rise of hybrids
Japan’s hybrids toyota And Maruti Suzuki – subsidiary in India Suzuki Engine Arun Agarwal, vice president of fundamental research at Indian brokerage Kotak Securities, said they are India’s top manufacturers with popular models such as Toyota Innova Hycross and Maruti Grand Vitara.
These companies currently dominate the Indian automobile market, where the majority of sales consist of internal combustion engine vehicles.
Maruti Suzuki leads auto sales with over 1.8 million cars sold in the 12 months ending March 2026, including 20,466 powerful hybrids, according to data from auto industry body Association of Indian Automobile Manufacturers, according to data shared by S&P Global Mobility.
Japanese-Indian joint venture Toyota Kirloskar Motors sold 366,896 cars, including 91,536 powerful hybrids, in the same period.
Hybrid cars have lightweight and powerful versions depending on their battery capacity. Unlike mild hybrids, powerful hybrids can drive on electric power alone for short distances at low speeds, resulting in better fuel efficiency.
NEW DELHI, INDIA – 2022/07/01: Press reporters are seen around the vehicle during the launch. Toyota has introduced the new Urban Cruiser Hyryder at the Hyatt Aerocity, Toyota’s first Self-Charging Powerful Hybrid Electric SUV and the first of its kind in the B SUV segment in India. (Photo: Pradeep Gaur/SOPA Images/LightRocket via Getty Images)
Stick Pictures | Light Rocket | Getty Images
Given growing customer acceptance, experts said more hybrid car launches are expected in the next 12 months than in the last five years combined.
“Hybrids do not require any behavioral change as consumers refuel at the gas pump as usual,” Murugan said, adding that hybrids offer better mileage without the range anxiety of EVs.
Experts told CNBC that this trend is likely to continue as many leading auto companies in India launch new hybrid models this year, attracting interest from buyers looking for better fuel efficiency. Meanwhile, EV adoption in the country is hampered by the lack of adequate charging infrastructure, limited access to affordable global EVs and concerns about resale value, Gupta said.
hyundai And Kiafrench car manufacturer Renault, honda It and Maruti Suzuki are planning to launch new hybrid models for Indian consumers, analysts said.
Meanwhile, despite warming ties between India and China and a trade deal between New Delhi and Washington, both Tesla and BYD expect to take their share of the world’s third-largest auto market while continuing to face high taxes.
I need to know
US seeks greater energy base in India
United States Accelerate efforts to sell oil and gas to India, the world’s third largest energy country The market is grappling with supply disruptions from the Middle East and is seeing its alternatives narrow after Washington ended waivers for Iranian and Russian crude.
India, South Korea aim to deepen ties amid geopolitical uncertainty
Uncertainty in trade with the US and the effort to move away from China make India and South Korea natural partners; but their relationship has not yet evolved from intention to meaningful implementation.
We won’t be surprised if the US-India trade deal has ‘one more period’ in its way
Sarah Bianchi, a former deputy U.S. trade representative and now a senior managing director at Evercore, said given the thorny issues in U.S.-India trade negotiations, more changes could happen before a deal is finalized.
approaching
April 23: HSBC’s April composite flash PMI
April 28: India’s March industrial production
