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European Automakers Face Deepening Sales Slump in India

Slow adaptation to compact SUVs under India’s tax regime is undermining their competitiveness.

Overview

  • Renault’s sales plunged to 37,900 units in FY2024-25 while Volkswagen and Skoda also posted year-on-year declines, according to JATO Dynamics data.
  • An initial emphasis on sedans left Renault, Volkswagen and Skoda underexposed as Indian buyers shifted rapidly toward utility vehicles.
  • India’s steep levies on models over four metres in length have disadvantaged European brands that traditionally build larger cars.
  • Domestic players Maruti Suzuki, Tata Motors and Mahindra & Mahindra have seized market share through extensive dealership networks, high localisation and early CNG, hybrid and EV rollouts.
  • Skoda’s launch of the Kylaq subcompact SUV signals a strategic course correction toward under-4-metre platforms and deeper local production.