“Launch activity is an important driver for bringing the volumes back,” Prithyani said while speaking to CNBC-TV18 during the BofA Securities 2025 India Conference. She added that the first half may stay muted due to seasonal factors and limited new offerings.
Over the past few months, most vehicle segments have shown limited growth. “Tractors are the only space that stands out,” Prithyani said. Good monsoons and better farm income supported demand in that segment.
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Outside of tractors, she noted that passenger vehicles (PVs), commercial vehicles (CVs), and two-wheelers saw flat or marginal growth. “It is a low season due to monsoons and lack of new launches,” she explained, suggesting a few more months of slow sales before recovery.
The entry-level segment continues to face headwinds from rising costs due to regulation. “Affordability has clearly been a challenge,” she said. Volumes in non-SUV and hatchback segments have been falling for the past two years, but the trend has now stabilised. “The data has been flatlining in the last six months,” she noted, which suggests the worst may be over.
Electric vehicles (EVs) have mostly grown in the two-wheeler space, but interest is now shifting to four-wheelers. “The narrative has shifted a lot more towards four-wheelers,” she said. EV penetration in four-wheelers has moved from below 2% to around 4% since October. “That tells you, if you bring products which are more exciting, if you price them attractively, there is a case to be made on the four-wheeler side.”
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In contrast, two-wheeler EV market share remains under 6%, with the top players changing frequently.
Regarding Tesla, Prithyani said the company’s India plans seem focused on retail and customer service, with no confirmed manufacturing plans yet. “It still feels like the cars, when they come into India, are going to be more niche premium,” she said.
She cautioned that foreign brands often struggle in India. “It’s not just about bringing a product. You need features, right price, and service networks.” Success depends on how Tesla adapts to local expectations.
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The industry has long sought a lower goods and services tax (GST) rate for two-wheelers, currently taxed at 28%. “Affordability has been a big issue,” she said. A cut to 18% would offer some relief, but the outcome depends on the upcoming GST council decision. “Let us see what happens at the GST meet,” she added.
For the full interview, watch the accompanying video
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