Four-Wheeler Manufacturers React to Union Budget 2026-27

Indian Passenger Vehicle Industry Leaders React to Union Budget 2026–27

The Union Budget 2026–27 has arrived at a very important time for India’s passenger vehicle and four-wheeler industry. While demand has softened in a few segments, EV adoption, technology upgrades, and global competition continue to rise. Although the budget does not offer direct incentives for passenger vehicles, it clearly supports the sector through higher infrastructure spending, a strong manufacturing push, clean mobility focus, and supply chain strengthening. 

In addition, increased capital expenditure, better highways, and improved regional connectivity may support vehicle demand, especially in Tier-II and Tier-III markets. Overall, the budget sends a message of policy stability and long-term growth, which many four-wheeler manufacturers see as positive for future investments and sustained industry momentum.

Four-Wheeler Manufacturers Share Their Views on Budget 2026–27

Balbir Singh Dhillon, Brand Director, Audi India, said:

"The Union Budget’s strong emphasis on infrastructure and capital expenditure is a positive enabler for India’s mobility landscape. Improved highways and intercity connectivity, especially across Tier-II and Tier-III markets, are strengthening the ownership and usage ecosystem for luxury automobiles.

The government’s focus on fiscal prudence, macroeconomic stability, and ease of doing business reinforces confidence for long-term investments in the automotive sector.

Initiatives like the development of rare earth corridors and the advancement of ISM 2.0 under the India Semiconductor Mission are timely and critical. They signal a clear intent to build resilient domestic supply chains and a technology-driven manufacturing ecosystem that will support the future of automotive and electric mobility in India."

Jyoti Malhotra, Managing Director, Volvo Car India, said:

“The continued focus on maintaining and improving the current growth rate in the Union Budget 2026-27 should help the economy to enhance productivity and competitiveness, by building resilience to a volatile global economy. The budget proposals are a welcome move for the entire productive sector, including the mobility sector. The maintenance and sustenance of growth will encourage consumption across the board, creating a larger market for high value items. Coupled with ease of handling direct taxation and customs related rules, the economy should continue in an upward trend. Overall, the measures are targeted at maintaining the momentum of the Indian economy.”

Dr. Anish Shah, Group CEO & MD, Mahindra Group, said:

“We applaud the Government of India’s Union Budget 2026 presented today by Finance Minister Nirmala Sitharaman. This Budget focuses on enhancing India’s competitiveness in the world, takes meaningful steps towards atmanirbharta and enables a wider participation in the benefits of economic growth.

The emphasis on frontier and strategic manufacturing sectors, including the launch of enhanced schemes such as Biopharma Shakti and the Semiconductor Mission (ISM 2.0), reflects a clear commitment to building global-scale manufacturing capabilities. Strengthening domestic value chains and reducing critical import dependencies will be key to India’s future industrial leadership.

We particularly welcome the significant increase in capital expenditure to Rs 12.2 lakh crore for FY27, which underscores an unambiguous policy focus on infrastructure, regional development and job creation across the country. This will play a pivotal role in crowding in private investment, enhancing productivity and supporting the growth of tier-2 and tier-3 cities as emerging economic hubs.

The proposal to establish a dedicated Rs 10,000 crore SME growth fund and incentives for industry clusters is a positive step toward enabling future job creation, supporting enterprise scaling, and boosting competitiveness of small and medium businesses.

Initiatives to promote critical minerals, rare earth corridors and enhanced electronics and capital goods manufacturing are forward-looking and essential for a resilient industrial ecosystem that can thrive amid global uncertainties. And, most importantly, the emphasis on sabka saath, sabka vikaas is commendable. The actions to ensure every community has access to resources and opportunities will enable robust and sustainable economic growth.

Overall, Budget 2026 signals continuity in policy direction, a firm commitment to sustainable and inclusive growth, and efforts to unlock India’s economic potential at scale. We believe these measures can accelerate innovation, enhance value-added manufacturing and strengthen India’s standing in the world.”

Tarun Garg, MD & CEO, Hyundai Motor India, said:

“Further building on the mega GST 2.0 reforms, the Union Budget 2026–27 presents a long-term focused roadmap that accelerates India’s rise as a global manufacturing hub and Atmanirbhar Bharat. Focus on the rare earth corridor, EV Battery and Electronics manufacturing, MSME empowerment, inclusivity and AI investments position India for global leadership. The strong push for tourism, rural growth and enhanced regional connectivity will further spur economic activity and open new avenues for advanced mobility, logistics and transportation solutions. With a bold capital outlay, simplified taxation and improved ease of doing business, this Budget is a decisive step towards a healthy and Viksit Bharat, reinforcing confidence in India’s growth story.”

Stephane Deblaise, CEO, Renault Group India, said:

"The Union Budget 2026–27 sends a strong and reassuring signal of policy continuity and intent for India’s manufacturing-led growth. Anchored in the Kartavya pillars for Viksit Bharat, the Budget demonstrates a clear commitment to building resilience, competitiveness and technological depth across strategic sectors. The progression to India Semiconductor Mission 2.0, with its focus on equipment, materials, full-stack Indian IP and supply-chain strengthening, aligns closely with the evolving needs of the industry. The targeted push to reduce critical import dependencies, through initiatives on rare earth magnets and continued customs duty exemptions on capital goods for lithium-ion cells, creates confidence for deeper localisation and sustainable mobility. Supported by public capital expenditure of Rs 12.2 lakh crore and enhanced logistics corridors, the Budget provides greater momentum to responsible growth of the Indian economy."

Piyush Arora, Managing Director & CEO, Skoda Auto Volkswagen India, said:

"We welcome the Union Budget 2026–27 for the clear direction it sets on India’s long-term economic priorities as the country progresses towards the Viksit Bharat 2047 vision. It sends a strong message of policy stability, which is essential for sustained manufacturing investments.

The continued emphasis on manufacturing competitiveness and trade facilitation, including progress on the India–EU FTA, strengthens India’s position in global supply chains and reinforces its role as a key automotive manufacturing and export base. The focus on SME growth and the revival of legacy industrial clusters will further enhance the resilience and depth of India’s industrial and supplier ecosystem."

What Budget 2026–27 Means for Passenger Vehicles

Overall, Union Budget 2026–27 builds confidence rather than excitement. However, that stability matters most for passenger vehicle manufacturers planning long-term investments. Better infrastructure, stronger supply chains, and regional growth will support demand in the coming years.

Four-wheeler manufacturers see this budget as a steady step toward sustainable growth. Stay connected with CarJunction for more simple and clear updates from the automotive world.