M&M

Adds details paragraph 2 onwards

Oct 7 (Reuters) - Indian dealers' auto sales grew 5.2% year-on-year in September, with upbeat growth across two-wheelers and passenger vehicles, as tax cuts boosted demand during the festive season, the Federation of Automobile Dealers Associations said on Tuesday.

While sales were muted in the first three weeks of September, they surged after September 22, when the revised goods and services tax rates took effect, the auto dealers association said.

Two-wheeler sales climbed 6.5% from a year earlier, while passenger vehicle sales grew 5.8%.

Dealers posted record high sales during the nine-day Navratri festival, the association said, with a 34% year-on-year jump during the period, as a wave of new customers entered showrooms and existing ones upgraded their vehicles, taking advantage of lower taxes and festive schemes.

The auto dealers body expects an above-normal monsoon, strong harvest, and steady lending rates to boost purchasing power of consumers, driving demand.

It also expects "peak sales" during the Diwali festival in October, when Indians typically tend to make high-value purchases.

(Reporting by Kashish Tandon in Bengaluru; Editing by Mrigank Dhaniwala and Ronojoy Mazumdar)

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Updates Sept 26 story on Sept 29 with more on VW's position on tax evasion allegations in paragraph 2, 18, 19

By Aditi Shah

NEW DELHI, Sept 26 (Reuters) - Volkswagen Group is restructuring its business in India, a key growth market for the carmaker where it wants to invest more but is grappling with policy changes and growing competition, according to an internal memo reviewed by Reuters.

The move comes as the company faces India's biggest-ever import tax demand of $1.4 billion for allegedly evading levies, and as its market share languishes despite more than two decades of operations in the world's third-largest car market. It has denied the tax claims.

Skoda Auto, a Volkswagen Group brand, which has been leading the carmaker's India strategy since 2018, has hired external experts to conduct a thorough review of its systems and processes and recommend improvements, Piyush Arora, chief of the local unit said in a memo sent to employees on September 8.

"Engaging a third party will provide a neutral perspective and some out-of-the-box ideas. I request you to support and cooperate with the team," he said in the memo, which was reviewed by Reuters.

The memo did not detail any changes on investment and jobs.

Skoda is deeply committed to the country and will invest in new technologies and manufacturing even as it faces shifting market trends and increasing competitive pressures, Arora added.

The exercise, which he said is the beginning of a "high performance organisation" journey and a course correction, coincides with the departure of close to 10 senior level executives at the carmaker over the past few weeks, two sources aware of the exits said.

This includes Nalin Jain, its finance chief and India board member; Sarma Chillara, head of human resources; Deepti Singh, head of external affairs; Hemant Malpani, head of cost control; and Shriniwas Chakravarthy, head of quality management, the two sources said, adding some resigned and some were asked to leave.

Skoda Auto Volkswagen India said that personnel changes correspond with standard company HR processes, without elaborating.

"India is a key market in Skoda Auto's internationalisation plans. We are always considering new business opportunities and are evaluating various options to ensure the best possible solution to implement our strategy in the highly dynamic Indian market," the company said in a statement.

Skoda is at a crucial point and needs to finalise its next leg of investment in India, a key market for the carmaker outside Europe given it no longer has a big presence in China and has exited Russia.

With stricter vehicle fuel efficiency norms set to kick in from 2027, all carmakers will have to introduce EVs and Skoda and VW currently do not sell any.

The company has plans to adapt Volkswagen's EV technology from China for India in which Skoda CEO Klaus Zellmer has previously said it will invest and is looking for a partner with "local roots". It has an agreement with India's Mahindra & Mahindra MAHM.NS to supply some EV components.

The restructuring is to ensure the company is lean and agile to compete with nimbler rivals ahead of making new investments, said a third source with direct knowledge of the matter.

Despite being in the country for over two decades, the carmaker has struggled to become a significant player. Volkswagen and Skoda brands together account for just 2% of India's 4 million units a year car market lagging newer rival Kia 000270.KS and established players like Toyota 7203.T.

Even as the carmaker's revenues in India have nearly tripled to $2.15 billion from about $766 million five years ago, its profit in India has dropped to $10.6 million from about $85 million over the same period, regulatory disclosures showed.

Skoda Auto Volkswagen is also embroiled in a legal tussle with India's tax department over allegations it misclassified imports of some Audi, VW and Skoda cars to evade higher duties.

It says its practices are in line with India's rules.

A court is yet to rule but if the company loses, it will need to fork out $2.8 billion including penalties and interest.

(Reporting by Aditi Shah; Editing by Kim Coghill, Neil Fullick)

(([email protected]; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

Sept 15 (Reuters) - Ashok Leyland Ltd ASOK.NS:

• SIAM - INDIA'S AUGUST 2-WHEELER SALES 18,33,921 UNITS

• SIAM - INDIA'S AUGUST 3-WHEELER SALES 75,759 UNITS

• INDIA AUTO INDUSTRY BODY SIAM - INDIA'S AUGUST TOTAL DOMESTIC PASSENGER VEHICLE SALES 3,21,840 UNITS

Source text: [ID:]

Further company coverage: ASOK.NS

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NEW DELHI, Sept 11 (Reuters) - Some vehicles using 20% ethanol-blended fuel could suffer from reduced mileage and acceleration, a senior executive at Indian SUV maker Mahindra & Mahindra MAHM.NS said on Thursday.

Mahindra is drafting an advisory on the E20 blended fuel, which should reach customers next week, Nalinikanth Gollagunta, CEO of its automotive division, said at an industry body conclave.

E20 recently became the only choice of fuel at nearly 90,000 fuel stations across India, leading to complaints from motorists concerned about the impact on older vehicles.

(Reporting by Aditi Shah in New Delhi, Writing by Nandan Mandayam in Bengaluru
Editing by David Goodman)

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NEW DELHI, Sept 4 (Reuters) - Indian Finance Minister Nirmala Sitharaman unveiled tax cuts for hundreds of consumer items, from soap to cars, in the biggest overhaul of the goods and services tax (GST), set to take effect from September 22.

Here are key highlights:

MAJOR CHANGES

India will have two key tax rates of 5% and 18% from September 22, versus four now. A new tax slab of 40% will apply to high-end goods, but all additional levies above that are to be abolished, bringing down effective tax rates on mid-size and big cars.

REVENUE LOSS, INFLATION IMPACT

The government estimates the cuts will cause revenue loss of 480 billion rupees ($5.5 billion), far lower than economists' estimate ranging from 1 trillion rupees to 1.8 trillion rupees.

Citi said India's inflation could ease as much as 1.1 percentage points if the cuts are fully passed through to consumers. India's retail inflation rate fell in July to its lowest in eight years.

TAX CUTS ON DAILY ITEMS

A tax panel approved lower GST of 5% on items of everyday use such as packaged food, medicines, toothpaste, fruit, milk products, talcum powder and shampoo, against 12% to 18% now.

The cut is expected to lift the sales of fast-moving consumer goods firms such as Hindustan Unilever HLL.NS, Nestle NEST.NS and Godrej Industries GODI.NS, while lowering costs for farmers.

It will abolish tax on individual life and health insurance products sold by companies such as LIC LIFI.NS, SBI Life Insurance SBIL.NS and ICICI Prudential Life Insurance ICIR.NS.

HOLIDAY BOOST TO SALES

The government has cut taxes on items such as cars, TVs and even cement, which could boost sales during the festival season that typically runs from the last week of September until November. India's tax panel also cut GST on air conditioners, ambulances, dishwashers, three-wheelers and hybrid vehicles.

Carmakers such as Maruti MRTI.NS and Toyota 7203.T, and manufacturers of consumer applicance such as LG Electronics LGEL.NS and Sony 6758.T are set to benefit immediately when the new rates kick in.

The tax panel also lowered the effective tax for big cars to 40% from the current rate of as much as 50%, making cars from Mercedes-Benz AGMBGn.DE, AUDI Aktiengesellschaft and BMW BMWG.DE attractive. GST on EVs was kept at 5%, giving relief to carmakers such as Tata Motors TAMO.NS and Mahindra & Mahindra MAHM.NS after a panel recommended an increase.

The government lowered taxes on fertiliser and tractors to help lower costs for farmers, recently come in the spotlight as Prime Minister Narendra Modi vowed to protect them following a breakdown in India-U.S. trade talks.

MAIN LOSERS

GST was raised to 18% from 12% on apparel and clothing accessories that cost more than 2,500 rupees, which could hurt global brands such as Marks and Spencer MKS.L, Levi Strauss LEVI.N, and Zara.

The tax on coal went to 18% from 5%, but the effective tax rate on fizzy drinks make by PepsiCo PEP.O and Coca-Cola KO.N was held at 40%.

($1=87.5060 Indian rupees)

(Reporting by Aftab Ahmed; Editing by Clarence Fernandez)

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Adds comments from carmakers in paragraphs 13-15, bullet 4

By Nikunj Ohri and Aditi Shah

NEW DELHI, Sept 2 (Reuters) - An Indian tax panel has proposed steep increases in consumer levies on luxury electric cars priced above $46,000, a government document showed, a move that could impact sales of carmakers such as Tesla TSLA.O, Mercedes-Benz, BMW and BYD.

Prime Minister Narendra Modi is aiming to reform India's tax system and is pushing Indians to buy more domestic goods just when relations with the United States have soured due to high tariffs. His government has recommended hefty cuts in the goods and services tax (GST) that could make everything from shampoos to electronics cheaper.

The key panel tasked with making rate suggestions to India's powerful GST Council has backed sweeping cuts to many items in line with Modi's overhaul, but it has called for raising taxes on electric cars, the document detailing its recommendations showed.

The panel recommended raising the GST rate to 18% from 5% currently for EVs priced between 2 million and 4 million rupees ($23,000-$46,000). It also proposed hiking the tax to 28% for cars priced above $46,000, saying that such vehicles cater to the "upper segment" of society and are largely imported rather than manufactured domestically.

But Modi's government has simultaneously decided to do away with the 28% tax rate altogether, leaving the GST Council with the option to increase the tax on EVs to 18%, or put them in the newly planned 40% category carved out for certain luxury goods, said an Indian government source familiar with the discussions.

India's GST Council - led by the federal finance minister and which has members from all Indian states - is meeting on September 3-4 to review the proposals, and has the ultimate authority on decision-making.

The secretariat of the GST Council did not respond to Reuters queries.

After the Reuters story, the Nifty Auto index .NIFTYAUTO turned negative and fell as much as 0.5%, with local automakers Mahindra and Mahindra MAHM.NS falling almost 3% and Tata Motors TAMO.NS dropping 1.2%.

India's EV market is small, making up about 5% of total cars sold in April to July this year, but growth in the segment has been rapid: EV car sales in India rose 93% to 15,500 units during that period.

"The uptake of electric vehicles is increasing and while, the low rate of 5% is to incentivise faster adoption of electric vehicles, it is also important to signal that higher-priced EVs can be taxed at higher rates," said the document, detailing the tax panel's recommendations.

The proposal could affect domestic EV makers such as Mahindra and Tata Motors, though their offerings above the 2 million rupee price range are limited.

Foreign automakers offering high-end EVs stand to be hit harder. Tesla just launched its Model Y in India with a base price of $65,000, while Mercedes-Benz MBGn.DE, BMW BMWG.DE and BYD 002594.SZ also offer top-end luxury electric cars.

Carmakers have unanimously called for maintaining the 5% GST rate to avoid disrupting India's EV aspirations and targets.

In a statement, Tata told Reuters it is "imperative" the tax rate is retained as any hikes will slow "the transition to clean mobility." BMW India, which is investing in expanding its EV portfolio in the country, said an increase "can derail the vision of high electric adoption and local production."

Mercedes-Benz said that an upward revision would "mostly impact the entry level" luxury cars. "Our top end luxury battery EVs will not be impacted much," said Santosh Iyer, CEO, Mercedes-Benz India.

In July, Tata Motors led the Indian electric car market with a near 40% market share, while Mahindra has 18%. BYD holds a 3% market share, while Mercedes and BMW together account for 2%. Tesla is taking bookings but has yet to start deliveries.

Tesla has opened two showrooms in India in recent months, years after Elon Musk repeatedly criticised high tariffs of roughly 100% on imported cars. The GST tax is applied on top of these tariffs, further increasing costs of Tesla cars.

(Reporting by Nikunj Ohri and Aditi Shah; Editing by Aditya Kalra, Jacqueline Wong, Kim Coghill and Bernadette Baum)

By Aditi Shah

NEW DELHI, Aug 31 (Reuters) - India's roll-out of fuel blended with 20% ethanol will hurt a vehicle's mileage by 2%-4% but is safe to use, a lobby group representing the country's automakers said, aiming to assuage motorists' concerns in the world's third-largest car market.

India set a 2025 target years ago for 20% ethanol blending in fuel, called E20, as part of Prime Minister Narendra Modi's focus on clean energy. But in recent weeks it has become the only choice at nearly all fuel stations, causing furore among drivers over its impact on vehicle performance and durability, especially older vehicles.

Using E20 fuel in older vehicles lowers mileage but is not a safety risk, P.K. Banerjee, executive director at the Society of Indian Automobile Manufacturers (SIAM), told reporters late on Saturday at a news event in New Delhi.

"Millions of vehicles are plying on E20 for quite some time now. Not a single vehicle breakdown or engine failure has been reported," said Banerjee, adding that if issues arise, warranty and insurance claims will be fully honoured by companies.

SIAM represents India's major carmakers including Maruti Suzuki MRTI.NS, Hyundai Motor HYUN.NS, Mahindra & Mahindra MAHM.NS, Tata Motors TAMO.NS and Toyota Motor 7203.T.

More than a dozen executives from auto companies, fuel retailers and industry groups were present on stage, addressing questions from the media at the event on India's ethanol-blended petrol programme.

Banerjee said claims of a 50% drop in fuel efficiency are unfounded and misinformed. Scientific studies conducted in a controlled environment show a 2%-4% decrease, putting a number to the reduction for the first time, he said.

However, driving in real world conditions can contribute to higher drops in mileage due to a variety of factors.

"On road it could be very different because of the way in which the vehicles are maintained and driven so that difference will be there," said C.V. Raman, executive committee member at Maruti Suzuki, India's biggest carmaker.

While India has been gradually rolling out E20 fuel since 2023, older blends, like E5 and E10, typically seen as more compatible with older vehicles, were also offered.

However, these older fuel mixes have now been removed from nearly all of the country's 90,000 fuel stations, leaving drivers with just one choice - a decision that is unlikely to change.

In recent weeks, worried motorists took to social media over concerns about large fuel efficiency drops and confusing statements from carmakers. Carmakers first said E20 fuel had not been tested for compatibility with older vehicles, but backtracked later saying it is safe to use.

Automakers, already battling slower sales and shortages of rare-earth magnets, have provided mixed guidance, adding to consumer anger over the lack of choice. Public interest litigation against the move will be heard in the Supreme Court on Monday.

(Reporting by Aditi Shah; Editing by Michael Perry)

(([email protected]; +91-11-4954 8023, +91-11-3015 8023; Reuters Messaging: twitter: @aditishahsays))

By Aditya Kalra, Saurabh Sharma and Aditi Shah

NEW DELHI/LUCKNOW, Aug 29 (Reuters) - The Indian government is facing a backlash from motorists after the nationwide rollout of fuel blended with 20% ethanol, amid fears - stoked by a lack of clarity from some automakers - that it may affect the performance of particularly older vehicles.

India, the world's third largest car market, set a 2025 target years ago for 20% ethanol blending in fuel, called E20, as part of Prime Minister Narendra Modi's focus on clean energy.

But in recent weeks it has become the only choice at nearly all of the country's 90,000 fuel stations. Older blends, like E5 and E10, typically seen as more compatible with old cars, have mostly been removed, leaving drivers with just one choice.

The government says E20 lowers carbon emissions, but has conceded in press statements addressing consumer worries that there could be a "marginal" hit on fuel efficiency of old cars.

Automakers, already battling slower sales and shortages of rare-earth magnets, have provided mixed guidance, adding to consumer anger over the lack of choice. Public interest litigation against the move will be heard in the Supreme Court on Monday.

Two fuel station managers in the northern city of Lucknow told Reuters that drivers were getting so angry that some stations had stopped providing information about the change.

"People hurl abuse at us. We then decided to not tell people about it," said one manager, Ramesh Pandey.

The ministries of petroleum and road transport did not respond to requests for comment.

"India's ethanol journey is unstoppable," petroleum minister Hardeep Singh Puri said on August 8, adding that "some lobbies with vested interests are actively attempting to create confusion."

Days later, Puri's ministry said "in case of certain older vehicles, some rubber parts and gaskets may require replacement" calling it a "simple process".

'GIVE ME THE RIGHT FUEL'

Automakers are racing to assuage concerns, but there is little clarity on the future of old cars in particular.

Skoda VOWG_p.DE has issued an FAQ on its website saying that components of its cars sold in India before April 2020 "are not evaluated" for E20. In a statement to Reuters on Friday, it said vehicles sold after that date were "fully material-compatible", without explaining what happens to older cars.

Toyota 7203.T said in a statement that "a modest variation" in fuel economy in its cars was likely with E20.

On Monday, Renault RENA.PA told tech consultant Ankur Thakur, 28, via email that his 2022 Renault Triber had "not been tested" for E20 and it was "not advisable" to use the fuel.

He posted the screenshot of the email on X, which went viral and attracted more than 700,000 views. Renault then told Thakur - and Reuters in a statement on Friday - that based on government tests E20 poses "no serious challenges" for old cars.

Thakur, unconvinced, is now using a pricey no-ethanol fuel still available at select pumps. "Just give me the right fuel my car was originally made for," he told Reuters.

A Reuters review of a fuel tank flap and user manual of an Audi Q3 purchased last year in India showed it recommended only E5 and E10 fuel.

The fuel tank of a 2024 Mahindra MAHM.NS Scorpio was pasted with a warning sticker: "CAUTION. PETROL/E10 FUEL ONLY".

Mahindra and Audi did not respond to Reuters queries.

(Reporting by Aditya Kalra, Saurabh Sharma and Aditi Shah. Additional reporting by Arpan Chaturvedi. Editing by Mark Potter)

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Aug 25 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA AND MAHINDRA LTD - AVINASH RAO APPOINTED AS MD & CEO OF MAHINDRA SUSTEN

Source text: ID:nBSEGpgFw

Further company coverage: MAHM.NS

(([email protected];))

Aug 15 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• SHOWCASES FOUR SUV DESIGN CONCEPTS BASED ON NU_IQ PLATFORM

• SUVS BASED ON NU_IQ PLATFORM SET TO LAUNCH STARTING 2027

Source text: ID:nBSE1Dqxdz

Further company coverage: MAHM.NS

(([email protected];;))

Aug 12 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA & MAHINDRA - UNIT APPROVED ISSUANCE OF SHARES FOR 18 BILLION RUPEES TO SHAREHOLDERS OF MSPL

Further company coverage: MAHM.NS

(([email protected];))

Aug 7 (Reuters) - India's upcoming festive season is expected to lift near-term sentiment among auto dealers, but U.S. tariffs could dent consumer confidence, prompting higher household savings and weighing on discretionary spending, including vehicles, the Federation of Automobile Dealers Association (FADA) said on Thursday.

Vehicle dealers expect major festivals, including Rakhi, Janmashtami, Independence Day and Ganesh Chaturthi, along with targeted promotional schemes and healthy stock levels to drive sales.

However, the anticipated wealth erosion from fresh tariffs by the U.S. could erode consumer confidence, trigger a precautionary rise in household savings and exert pressure on discretionary spending, including on vehicles, FADA said.

(Reporting by Chandini Monnappa in Bengaluru; Editing by Sonia Cheema)

(([email protected]; https://www.linkedin.com/in/chandini-monnappa-8a37b013b/;))

Recasts paragraph 1, adds details from earnings call

By Meenakshi Maidas

Aug 4 (Reuters) - Indian e-scooter maker Ather Energy ATHR.NS reported a narrower first-quarter loss on Monday on higher demand, and said it expects a week of "potential business impact" only in the second quarter due to China's rare-earth magnet export ban.

Ather expects around a week's worth of a supply gap to dealers due to China's ban but aims to manage the impact with existing inventory, CEO Tarun Mehta said in post-earnings call.

The company is also exploring alternatives, including a shift to more widely available light rare earth magnets, which remain unrestricted, he added.

China, which supplies around 90% of the world's rare earth magnets, imposed the export ban in April.

Last week major Indian carmakers Mahindra MAHM.NS, Hyundai India HYUN.NS shrugged off medium-term issues from the export ban, with Mahindra saying it was using alternatives such as light rare-earths and ferrites.

Ather Energy, which makes the popular "Rizta" e-scooter, said its losses narrowed to 1.78 billion rupees ($20.3 million) in the quarter ended June 30 from 1.83 billion rupees a year ago, helped by sales that grew nearly two-fold to 46,078 units.

Backed by Hero MotoCorp HROM.NS, Ather entered India's electric vehicle market in 2018 as an early mover, but has since lost ground to rivals such as Ola Electric OLAE.NS and legacy players with stronger finances and a broader reach.

Its revenue surged 78.8% on-year to 6.45 billion rupees, but rising material costs pushed overall expenses 54.4% higher.

Its adjusted gross margin rose to 23% from 19% a year ago, driven by non-vehicle revenue such as warranty programs, software and accessories such as its "Halo" helmets.

Ather's shares rose as much as 19.4% to a record high of 414.65 rupees on Monday after its quarterly results and closed 14% higher.

($1 = 87.6320 Indian rupees)

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Nivedita Bhattacharjee, Mrigank Dhaniwala and Sonia Cheema)

(([email protected]; +91 8921483410;))

Corrects typographical error in headline

Aug 1 (Reuters) - Indian automaker Mahindra & Mahindra MAHM.NS said on Friday its sales of sports utility vehicles to dealers rose 20% year-on-year in July, supported by new launches and deliveries of electric SUVs.

Mahindra has been beating its peers in terms of sales growth, helped by successful launches that have drawn customers from rivals such as Hyundai India HYUN.NS and Tata Motors TAMO.NS.

Market leader Maruti Suzuki MRTI.NS and rivals Hyundai India and Tata Motors are yet to report their sales numbers.

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Mrigank Dhaniwala)

(([email protected]; +91 8921483410;))

July 31 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• MAHINDRA AND MAHINDRA LTD - SELLS 35% STAKE IN MAHINDRA IDEAL LANKA TO IDEAL MOTORS

• MAHINDRA AND MAHINDRA LTD - RECEIVES LKR 50 MILLION FOR SALE OF STAKE IN MAHINDRA IDEAL LANKA

Source text: ID:nBSE9x173b

Further company coverage: MAHM.NS

(([email protected];))

July 23 (Reuters) - Mahindra Holidays and Resorts India MAHH.NS reported a 33.6% surge in first-quarter profit on Wednesday, underpinned by robust domestic sales.

Mahindra Holidays' consolidated net profit rose to 78.7 million rupees ($911,037.80) in the quarter ended June 30.

($1 = 86.3850 Indian rupees)

(Reporting by Ananta Agarwal in Bengaluru; Editing by Sherry Jacob-Phillips)

(([email protected];))

** India's Mahindra & Mahindra Financial Services MMFS.NS rises as much as 1.7% to 267.45 rupees

** Co's June quarter profit rises 6.4%, benefiting from higher interest income and rental income

** Revenue from operations up 15.6%

** YTD, MMFS up 2.8%

(Reporting by Ananta Agarwal in Bengaluru)

(([email protected]))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, July 15 (Reuters Breakingviews) - Tesla TSLA.O, meet India. After years of eyeing the country, CEO Elon Musk’s $1 trillion electric-vehicle giant is opening its first showroom in the world’s third-largest car market, in Mumbai, on Tuesday. High import duties and modest incomes are likely to keep sales relatively low. But India offers Musk an opportunity too good to drive past.

It might not immediately seem so. Some 4.3 million new cars were sold in the 12 months to the end of March, according to the Society of Indian Automobile Manufacturers. EVs accounted for just 111,000, or 2.5%, of that, per JMK Research & Analytics, which has local player Tata Motors TAMO.NS dominating with a 53% share of electric vehicles purchased, followed by Mahindra and Mahindra MAHM.NS, and MG Motor. Moreover, the average price is less than $20,000.

That’s way below what Indian drivers will have to pay for a Model Y. Its on-the-road price is nearly $70,000, including an import tariff of 70%. New Delhi recently reduced the levy to 15% for overseas manufacturers investing at least $500 million and willing to manufacture onshore within three years, in part to woo Tesla and in part tosmooth the way for a trade deal with the United States.

But there’s not enough local demand to justify building the 500,000-plus cars-a-year factory that Musk favours. And exports to other countries in Asia can be met by the company’s Shanghai operation – or even by its factories in Europe and the U.S., which are currently operating below capacity.

There are, though, reasons to think that Tesla can be more than an afterthought of a player in India. While small, the country’s EV market is growing quickly. It barely existed five years ago, and its share of overall car sales has almost doubled to just under 4.4% in June, according to the Federation of Automobile Dealers Associations. And the ultra-rich are increasingly adding battery-powered rides to their fleets alongside gas guzzlers.

Let’s assume India’s new-car sales hit 5 million in 2030, with EVs accounting for a tenth. If Tesla can pick up 10% of those, it’d be selling 50,000 vehicles a year. Granted, that’s bigger than India's entire luxury car market in 2023 and a rounding error compared to the 1.8 million cars it sold globally last year. But as the world’s most populous country becomes more prosperous, having a strong base to build on will be crucial.

Follow Ujjaini Dutta on Linkedin and X.

CONTEXT NEWS

Tesla is set to open its first India showroom on July 15 in Mumbai’s Bandra Kurla Complex, Reuters reported on July 11.

At present the carmaker is not considering building a factory to manufacture vehicles in India. Teslas imported into the country will face a 70% tariff and other levies, the Reuters report added.

India on March 14 lowered to 15% import taxes on electric vehicles for carmakers committing to invest at least $500 million and begin domestic manufacturing within three years.

(Editing by Antony Currie; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

July 11 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS:

• TO INVEST IN RIGHTS ISSUE OF MAHINDRA LOGISTICS TO FULL EXTENT OF CO'S RIGHTS ENTITLEMENT

• TO SUBSCRIBE TO ANY UNSUBSCRIBED PORTION OF RIGHTS ISSUE OF MAHINDRA LOGISTICS

Source text: ID:nBSEXKr91

Further company coverage: MAHM.NS

(([email protected];))

By Aditi Shah and Neha Arora

NEW DELHI, July 10 (Reuters) - Indian auto company Mahindra & Mahindra and parts maker Uno Minda are looking to make rare earth magnets locally to cut reliance on China, as New Delhi draws up incentives for production of the critical components, company and government sources told Reuters.

China, which produces around 90% of the world's rare earth magnets, put restrictions in April on their export, and while it has restarted some supplies to the United States and Europe, Indian companies are still awaiting clearance from Beijing.

The disruption has prompted Prime Minister Narendra Modi's government to look at building up stockpiles of magnets and offering incentives for the domestic manufacture of the components critical to making electric vehicles and electronics.

"Some companies have shown interest in investing or setting up rare earth magnet production, including Mahindra," said a senior government official in Modi's administration.

"It will take a year or two to have our own production ... But we have to find ways to be independent," he said.

During a meeting in June with India's ministry of heavy industries, Mahindra MAHM.NS said it is open to partnering with a company to make magnets or entering a long-term contract with a supplier producing them locally, according to one of the sources.

Mahindra, which recently launched two electric SUVs, has captive demand for magnets and has indicated that the investment to make them locally is not that high, said the source.

Uno Minda UNOI.NS, supplier of parts to major carmakers in India like Maruti Suzuki MRTI.NS, also expressed interest in local magnet manufacturing at the same meeting, two of the sources said.

Maruti has already warned of production delays amid the disruption of rare earth magnet supply from China.

Component maker Sona Comstar SONB.NS, which supplies gears and motors to companies including Ford F.N and Stellantis STLAM.MI, was the first Indian company to show interest in making magnets domestically, it told Reuters in June.

Mahindra declined to comment. Minda and the ministry of heavy industries did not immediately respond to a request for comment.

A final decision by the two companies on the timeline of any investment into making rare earth magnets will depend on incentives offered by the government and the availability of raw materials, two of the sources said.

Availability of raw materials in India, which has the world's fifth-largest reserves of rare earth minerals, is not the biggest challenge. But the mining of them is.

The government controls rare earth mining through its entity IREL, which had an output of about 2,900 tons of rare earth ores in 2024. Most materials are used by the country's atomic and defence units, while some are exported to Japan.

But after the recent disruption of China's exports, IREL has plans to stop exports and expand its domestic mining and processing.

JSW Steel JSTL.NS has expressed an interest in mining rare earths in India but it would need government approval, two sources said, adding that mining, unlike magnet production, could take several years.

JSW declined to comment.

India is also looking to secure raw materials from elsewhere. Last December, IREL sent a team to Myanmar to study local rare earth resources and Modi's government is working with five Central Asian countries to jointly explore the mining of critical minerals.

(Reporting by Aditi Shah and Neha Arora; Editing by Tom Hogue)

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