Rupee at 90: Luxury cars to become expensive, exporters rejoice

Luxury car makers are contemplating a price hike in January

The rupee sliding to 90 against US dollar on Wednesday will increase the cost pressure on automotive companies across segments especially on those that depend on imported vehicles, or parts and components to produce vehicles within the country.

The falling rupee presents challenges for import-dependent luxury carmakers like Mercedes-Benz, BMW, Audi, Jaguar Land Rover, Tesla and Volvo. Industry sources said that some of these brands are contemplating a price hike in January.

Though not all such companies use the US dollar for imports, the rupee has weakened against other major currencies as well such as the euro and pound sterling which are used by the luxury car brands.

The rupee has declined against the Chinese yuan as well. This will increase cost for those companies that depend on electric vehicle (EV) battery cells and rare earth magnets, as China is the largest supplier of both these items to India’s automotive industry.

India almost fully imports all its requirement of EV battery cells and rare earth magnets. The rupee slide could lead EV makers to pass on the price hikes to customers. BYD, China’s largest Ev maker, will hike prices of the Sealion 7 EV in India in January, 2026.

However, the rupee slide spells good news for major automotive exporters like Bajaj Auto and Maruti Suzuki and for the rest of the automotive pack.

While domestic volumes for Pune-based Bajaj Auto during April to November, 2025 was down by 4% to 1.93 million units, its exports have jumped by 19% during the same period to 1.43 million, compared to the same months last year.

Maruti Suzuki, the country’s largest carmaker, saw no growth its domestic volumes during the April to November period of 2025 to 1.16 million units. However, its exports surged by 36% to nearly 285,000 units during the same period.

According to data supplied by the Society of Indian Automobile Manufacturers (SIAM), the exports of two-wheeler from India surged by 24% in during April-October, 2025 to 2.86 million as compared to the same period the previous year.

There was a jump in passenger vehicle (cars, SUVs and vans) exports too. The segment recorded a 17% jump in exports to 515,000 units during the same seven months of the year as compared to the previous year’s same months.

India is a major exporter of automotive products to countries in Africa, Latin America, west and south east Asia.

The rupee’s decline also spells good news for auto component manufacturers, who derive a significant portion of their revenue from exports. The US alone accounted for 32% of India’s auto component exports, which grew by 8% in FY25 y-o-y to $22.9 billion, according to the Automotive Component Manufacturers Association (ACMA).

India also imported $22.4 billion worth of components and parts during FY25, a growth of 7%, according to ACMA.