India's auto market sees a new battle: Struggling foreign car brands unveil revival plans

Companies like Skoda-Volkswagen, Honda Cars, Renault and Nissan are among mass market brands that have committed to introduce more than a dozen new products cumulatively in the next two years.

Cumulatively, these four brands have only 5% share of the passenger vehicle market in India as of August 2025. Passenger vehicles include cars, utility vehicles (including SUVs) and vans.

European luxury carmakers Volvo Cars and Audi, too, remain hopeful about their prospects in the Indian market after rivals Mercedes-Benz, BMW and Jaguar Land Rover doubled down on their bid to capture a higher market share.

Notably, the overall Indian market has been slow moving lately, with passenger vehicle sales growing just 2% in FY25, and declining by 2.4% in April-August 2025, with cars hit the hardest at 12% and 8.5% decline, respectively, according to data from the Society of Indian Automobile Manufacturers (Siam).

The move from the struggling group comes even as the top six brands—Maruti Suzuki, Tata Motors, Hyundai Motor India, Mahindra and Mahindra, Kia Motors, and Toyota Kirloskar—have stepped up efforts to consolidate market share. In FY25, these six brands cornered 91% share of the country’s passenger vehicle sales, rising from 89% in FY23, according to data from Federation of Automobile Dealers Association.

In the same period, all the lagging foreign carmakers saw their sales decline.

Puneet Gupta, director at S&P Global Mobility, said new offerings by the top six brands have won the trust of Indian consumers, something that the stragglers are not able to do. “Most of the foreign brands are struggling to find brand traction to get consumers to move towards their models," Gupta said.

To be sure, the struggling carmakers are still putting their bets on the Indian market and are hopeful about turning around their prospects.

Skoda and Nissan

On 24 September, Skoda introduced a premium sedan—Octavia RS—to India, 10 months after it launched the Kylaq SUV. The Czechia-based brand became the latest to renew its push after Renault, Nissan and Honda Cars also committed to launch new vehicles in the market.

Japanese brand Nissan, which sold its full stake in the joint manufacturing plant venture with Renault in March 2025, currently sells only one vehicle in India—the Magnite SUV.

“Over the next 18-24 months, Nissan Motor India will transition from a single-product portfolio to a multi-segment player with three new models—a sub-four-metre seven-seater B-MPV, a C-SUV five-seater, and a C-SUV seven-seater—all developed with Indian consumers at the centre," Saurabh Vatsa, managing director at Nissan Motor India, told Mint while acknowledging that the Indian market is competitive.

Nissan will also increase its showrooms in the country from 159 to 180 in the current financial year, Vatsa added.

Renault’s plans

Its French partner Renault, which saw sales nearly halve between FY23 and FY25 to 38,636 units, is planning five new launches by 2027. These will include two SUVs and an electric vehicle (EV). Further, it is increasing the number of dealerships from the current 362 across the country.

India managing director Venkatram Mamillapalle believes two primary levers will help in increasing sales in the upcoming years—Renault fully owning the Chennai plant (it was jointly owned with Nissan earlier) and diversifying the customer base to more premium buyers.

“We have mostly targeted the sub- ₹10 lakh segment, but now our customer profile will see a diversification to go beyond ₹10 lakh," Mamillapalle told Mint earlier in an interview.

The top executive said that the company will look to regularly launch products in the Indian market and invest in its sales and services network.

A report from Autocar Professional said that the planned launches include the updated Triber, Kiger and Duster as well as Bigster, which would be a seven-seater SUV based on the Duster platform. The updated Duster’s launch is anticipated next year.

To be sure, Renault launched the Duster SUV in 2012 in India, which turned out to be a popular car for the brand with 40,000 sales in the first year alone. However, the company did not bring the next generation Duster to India, reportedly due to high production costs.

Skoda-Volkswagen plans

Skoda-Volkswagen Group, too, will increase its touch points in the country and capitalize on new models to increase its sales and market share.

“Over the last three months, we have expanded into more than 310 touch points and we are now present in 177 cities," Skoda brand director Ashish Gupta told mediapersons on 24 September, pointing to what he called a big push from the brand in terms of getting closer to the customers.

“Our focus was into getting into new segments and new territories and new price points. We have done that with the introduction of the Kylaq," Gupta added, noting that sales between January to August 2025 have increased 130% compared to a year ago to nearly 47,000 cars.

Skoda Kylaq is a compact SUV that has largely resulted in the surge in sales for Skoda. Of the 47,000 sales mentioned by Gupta, Skoda Kylaq constituted about 30,000, which has helped boost the company’s sales in the country despite a slow passenger vehicle market.

Overall, Skoda currently sells three SUVs—Kodiaq, Kylaq and Kushaq—and the Slavia sedan in India.

Honda Cars

Japanese auto giant Honda Cars, which has seen its sales fall 22% to 64,727 between financial year 2023 and 2025, plans to launch five new SUVs in the Indian market by 2030, with one electric model designed according to Indian market needs, as per company announcements.

The company’s main driver of sales over the years, the mid-sized sedan Honda City, recorded falling sales from 35,038 in FY23 to 16,925 units in FY24. This further dropped to 10,901 units in FY25 in the domestic markets, suggesting a consistent decline in sales of a car that made Honda a popular brand in India.

While the company is now looking to tap growth using SUV models, Honda had earlier launched two SUVs—WR-V and BR-V—and one multi purpose vehicle, Mobilio, between 2014 and 2017, which were discontinued due to poor demand.

In September 2023, the company launched another SUV, the Elevate, which is also struggling. In FY24, it sold 33,642 units, which fell 33% to 22,321 units in FY25.

Luxury carmakers join in

As mass market brands double down on their bid to counter the consolidation and expansion of brands like Maruti, Hyundai, Mahindra and Tata, luxury players like Audi and Volvo are also introducing new models despite intense competition from their peers.

Audi saw its sales fall by 15% to 5,990 units while Volvo saw sales fall by 22% to 1,665 units in FY25. Comparatively, market leader Mercedes-Benz saw its sales grow 4% to 18,928 units in the same financial year.

Volvo launched facelifts of its XC90 and XC60 SUVs this year and has also launched its electric vehicle EX30 SUV in India for bookings. When asked about competition, Volvo Cars India managing director Jyoti Malhotra told Mint in an interview that the competition only helps the company grow and offer better products for consumers, helping expand the luxury brand.

As Volvo struggles to grow its share, Malhotra said that its new electric vehicle should help the company grow. It has begun booking its electric vehicles EX30 at ₹39.9 lakh, which is lower than the electric vehicle offerings of its rivals BMW and Mercedes.

Meanwhile, German luxury carmaker Audi, which used to be No. 1 in India a decade ago, fell to the fourth position in FY25. In an interview with Mint, Balbir Singh Dhillon, head of Audi India, said the company is focusing on improving the experience of customers and is in talks with its global management to bring more models to the Indian market.

“We are in the process of working with our headquarters to also bring more electric cars into the country as we are in the process of working out plans for more models to be launched in India subsequently," he said.

While the company has not specified its product launch plans, it is said to be working on introducing a new-generation Audi Q3 SUV by next year.

For both Volvo and Audi, the competition is intensifying as its rivals amp up the pressure. While the market leader continued to grow, BMW also witnessed a growth of 5% to 15,810 units while Jaguar Land Rover toppled Audi from the third position as it saw 40% year-on-year growth to 6,183 units.

While Mercedes has eight launches in its pipeline, BMW has also launched its all electric iX1 compact SUV along with i5 electric sedan. Jaguar Land Rover, which sells the Range Rover, Jaguar and Defender brands, is in process of shifting its production base in India through knocked down units.

While Range Rover and Range Rover sport are assembled in India, the company is now mulling bringing the local assembly of Defender in India. Further, its Jaguar brand is working on an all-electric positioning, which is set to launch next year.

Global Doubts

Despite the grand plans, experts are sceptical about how sustainably these brands can invest at a time when their parents are facing global turbulence.

“Global carmakers are facing tough competition with Chinese players, which is straining their ability to invest," S&P Global Mobility's Gupta said. “In this backdrop and the increasing competition from Indian car manufacturers, many of these brands will have to work really hard to find a way to sell more vehicles to consumers."

For instance, Nissan’s global chief executive Ivan Espinosa announced on 13 May that the company will shutter seven factories globally and cut 11,000 jobs in areas like manufacturing, sales, administration, research and contract staff, to protect profits.

Nissan’s operating profit for the financial year ended 31 March plunged by 88% to $472 million because of a slowdown in key markets like the US and China. The company also refrained from offering growth guidance due to uncertainty over US tariffs.

According to a report in French newsletter L'Informe, Renault is also planning to cut 3,000 jobs while Volvo Cars has also decided to cut 3,000 jobs owing to a hit in profits, the company said. Most global carmakers are reeling from pressure due to Chinese competition as well Trump tariffs.

The China factor

In the past few years, Chinese manufacturers like BYD are hitting the sales of European carmakers like Volkswagen in China. In the Chinese market, Volkswagen’s EV sales have declined 37%, hitting the key export base of German carmakers.

Analysts believe Chinese competition is increasing in the European region, affecting players like Volkswagen and Renault.

BYD holds a 3.1% market share in battery electric vehicles (BEVs) in the EU. According to a 26 June Elara Capital note, its exports to the EU and the UK have nearly doubled in 2025 year-to-date. “We believe China’s OEMs can gain incremental global PV market share in the next 3-5 years, thereby putting pressure on legacy OEMs," the note said.

Adding to the troubles of these carmakers are Trump tariffs. Volvo Cars said in July that it is taking a $1.2 billion impairment charge on its balance sheet owing to Trump tariffs.

Pressure due to global turbulence as well as intense investments by top car makers are putting the foreign brands in a difficult position, as per industry observers.

While Maruti is launching two new SUVs in the Indian market, Tata, Mahindra and Hyundai have lined up more than a dozen launches in the next four years.

But the managements of these brands in India insist that global events will have no bearing on their plans in India and they will continue to bring more cars to the market.

“There will not be any disruption to our teams here or our product plans in the country," Nissan’s Vatsa said in a virtual press meet in May after reports of Nissan layoffs became public. “We are on track to introduce new products and scale up growth in the market."

Volvo India’s Malhotra also insisted that job cuts and hit to profits globally will not impact the company’s operations in India.