5 Big Changes Set to Reshape the Indian Car Market

The Indian automotive industry is all set to receive the most profound transformation in a decade in the next couple of years. Not just new car launches, the car market in India is all set to witness significant changes in terms of technology, safety standards, and consumer expectations. Every carmaker is rethinking its strategy from the ground up, thanks to intense competition, stringent laws and evolving buyer preferences. 

Here are the five big changes that are set to reshape the Indian car market. 

1. Hybrids in Focus, Diesels Fading

Car manufacturers believe that hybrids could be the immediate replacement for the diesel cars in India. In fact, the Maruti-Toyota alliance has managed to create a new wave of buyers in the mid-sized SUV segment, which was earlier dominated by Diesel. Now, more mainstream carmakers have announced hybrids for the Indian market. 

Hyundai has officially announced to introduce 8 new hybrid vehicles in the country by FY2030. In fact, the next-gen Creta will be the first Hyundai to receive a strong hybrid engine. Furthermore, Mahindra has confirmed that its new NU_IQ platform is hybrid ready and the upcoming Vision concepts based SUVs will have hybrid engines. MSIL is also working on a low-cost hybrid engine, which will power its entry-level cars. Renault, Nissan and Honda are also developing hybrid SUVs for the Indian market. 

2. Small Cars Coming Back?

In recent times, we have witnessed consumers moving away from entry-level cars, including hatchbacks and sedans. However, India’s largest carmaker, Maruti Suzuki, believes that the small cars will regain their lost momentum. Post GST 2.0 reforms, Maruti dealers reported a massive increase in demand for small cars. 

In order to remain ahead of the competition, MSIL is bringing low-cost hybrid cars to India. Moreover, CNGs are set to witness a massive increase in the demand in near future. The company is working on multiple new small cars, including a 7-seater MPV in the sub-4 meter category. 

3. EVs to Gain Momentum

Tata Motors is currently dominating the EV segment with close to 40-50 percent market share. Things could change, as Maruti Suzuki is also entering the EV category with the long-awaited e Vitara SUV. Simultaneously, Mahindra is set to introduce its third Born Electric SUV - the XEV 7e. Adding to that, the NU_IQ based products will come with electric powertrains. 

4. Safety a Priority

Thanks to the Bharat NCAP and Global NCAP, automakers are now using their 5-star safety rating as a powerful marketing tool. The biggest upgrade is set to be the democratisation of advanced safety features. The ADAS suite is now mainstream, and even sub-4 meter cars are offered with safety features. The upcoming all-new Hyundai Venue will come with LEVEL 2 ADAS tech, while MSIL is preparing to introduce ADAS in its smaller cars such as the Fronx, Baleno and others. 

5. Icons are Reborn

Carmakers are using nostalgia as one of the most powerful ways to connect with buyers. While Tata Motors is set to re-introduce the iconic Sierra nameplate, the hugely popular Renault Duster is coming back in a new avatar in early 2026. The stories around these two lifestyle products will create an instant connection with a generation of buyers.

Also See - Top 10 Best-Selling Hatchbacks in India - September 2025