Iran war could hit India’s car production, auto body says

India’s auto industry body on Tuesday flagged concerns on the possible adverse impact of the Middle East war on automotive production, input and fuel prices, and freight rates.

Here are some key details:

The West Asia conflict is expected to pose short-term challenges for the auto industry, Shailesh Chandra, president of Society of Indian Automobile Manufacturers (SIAM), said.

Uncertainties arising from the West Asia conflict, particularly prices of crude oil and commodities, higher exchange rates and disruptions in shipping routes, remain a concern for the auto sector, the industry body said.

In the near term, the conflict may weigh on export volumes, and the evolving situation reinforces the need for calibrated supply chains and diversification of energy inputs, analysts at Antique Stock Broking said.

In the entry-level segment in April so far, buyer enquiries are strong, but converting them to sales is taking longer, the SIAM president said.

Car sales by manufacturers to dealers in the world’s third-largest car market rose 7.9% to 4.6 million units in the financial year 2026, industry data showed, compared to the previous fiscal year’s 2%, as consumer sentiment improved due to tax cuts.

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In September 2025, India slashed taxes on larger SUVs to 40% as an additional levy was dropped and on small cars and two-wheelers to 18% from 28%, helping support demand across segments.

Total domestic two-wheeler sales in the financial year 2026 rose 10.7% on-year compared to 9.1% growth last year, the industry data showed.