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ESG: The New Auto Imperative

ESG: The New Auto Imperative

November 18, 2025 10 min read Consumer Discretionary
ESG: The New Auto Imperative

Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?


My Expertise: 
I embarked on my journey with the Maruti Suzuki dealership in 1983, diving deep into the operations and collaborating closely with dealerships and OEMs. Over the past three decades, I’ve been at the forefront of significant transformations, from developing process policies and ERP systems to implementing balanced scorecards and conducting local market studies. Each decade brought a paradigm shift, and my hands-on experience has been a continuous learning adventure. 
Witnessing the transition from manual processes to advanced computerization was exhilarating. My exposure to ISO standards and TQM practices provided a comprehensive understanding of the industry’s intricacies. Today, I remain actively engaged with policymakers on green technology initiatives, which is both fascinating and educational. 
My focus is on developing long-term strategies for dealerships and providing insightful suggestions to ensure we stay ahead in this ever-evolving market. 

 


Q2. How do you see India’s passenger vehicle market evolving over the next 5–10 years, especially in the entry-level, premium, and SUV segments? 


India’s passenger vehicle market is poised for dynamic growth over the next 5–10 years, with SUVs leading the charge, premium segments expanding, and entry-level cars facing headwinds. Entry-level vehicles are under pressure due to rising costs and evolving safety norms, making them less accessible to first-time buyers. However, affordable electric vehicles (EVs) could rejuvenate this segment if infrastructure and incentives improve. 
The premium segment is gaining traction, driven by rising incomes, urban aspirations, and demand for advanced features like connected tech and ADAS. Luxury brands are expanding local operations and introducing EVs to cater to this demand. 
SUVs remain the fastest-growing category, favored for their road presence, versatility, and suitability for Indian conditions. Compact and mid-size SUVs dominate, and electrification is accelerating with models like Tata Nexon EV and MG ZS EV gaining popularity. The SUV market is projected to grow from USD 9.13 billion in 2024 to USD 11.38 billion by 2035. 
Overall, while entry-level growth may be modest, premium and SUV segments are expected to thrive, reshaping India’s automotive landscape. Automakers are adapting with new platforms, EV strategies, and feature-rich offerings to meet evolving consumer preferences and regulatory shifts. 

 


Q3. What role are digital tools, AI-based CRM, and analytics playing in improving customer experience and service efficiency? 


Digital tools, AI-based CRM systems, and advanced analytics are revolutionising customer experience and operational efficiency in the automotive industry, especially at the dealership level. AI-powered CRMs automate lead management, personalise communication, and provide actionable insights by analysing customer behaviour across channels. These systems now leverage generative AI to suggest next-best actions for sales teams—such as optimal follow-up timing, tailored messaging, and product recommendations—enhancing conversion rates and customer satisfaction. 
Analytics plays a vital role in predictive maintenance, helping dealerships and OEMs anticipate vehicle issues before they arise, thereby reducing downtime and building customer trust. It also supports inventory optimisation by identifying demand patterns, ensuring the right mix of vehicles and parts is available. Customer segmentation through data analysis enables targeted marketing campaigns, improving engagement and ROI. 
Dealerships are becoming more professional and tech-savvy with OEM support. Digital tools like virtual showrooms, online booking platforms, and mobile apps streamline the buying and servicing experience. Customers can explore vehicle-buying and servicing experience. Customers can explore vehicles, schedule service appointments, and receive real-time updates—all from their devices. OEMs are equipping dealerships with integrated digital ecosystems that include CRM, dealer management systems (DMS), and analytics dashboards, standardising service quality and enhancing professionalism.
Looking ahead, dealerships are evolving into experience hubs, offering personalised consultations and seamless digital interactions. Gen AI acts as a co-pilot for staff, handling queries, generating quotes, and resolving issues efficiently. This digital transformation is not only improving customer experience but also redefining how automotive businesses connect, operate, and grow. 

 


Q4. How important will sustainability and ESG alignment become for automotive retailers and OEMs in the coming decade? 


Sustainability and ESG (Environmental, Social, and Governance) alignment will become essential for automotive OEMs and retailers over the next decade. Regulatory mandates, investor expectations, and shifting consumer values are driving this transformation. Governments are enforcing stricter emissions norms and ESG disclosures, while investors favor companies with strong ESG credentials. Consumers, especially younger buyers, increasingly prefer brands that demonstrate environmental responsibility and ethical practices. 
OEMs are leading the charge by investing in green manufacturing, electrification, and transparent ESG reporting. Many are committing to net-zero goals and launching EV-only platforms, while also adopting global frameworks like GRI and TCFD for sustainability disclosures. 
Retailers and dealerships are evolving into ESG-aligned experience hubs. With OEM support, they’re adopting solar energy, paperless operations, and digital tools to reduce their environmental footprint. Social initiatives like inclusive hiring and community engagement are becoming integral to dealership strategy. OEMs are also equipping dealerships with integrated digital ecosystems—CRM, service platforms, and training modules—that enhance professionalism and service quality. 
Over the next 10 years, ESG will shift from being a compliance requirement to a competitive advantage. Automotive players that embed sustainability into their operations and customer experience will build stronger brand equity, attract investment, and ensure long-term viability in a rapidly evolving market. 

 


Q5. How are younger buyers’ decision criteria different from those of traditional family car buyers? 


Younger car buyers differ significantly from traditional family car buyers in their decision-making priorities. Younger consumers tend to value technology, design, and sustainability. They seek vehicles with advanced infotainment systems, smartphone integration, and driver-assist features. Aesthetics and personalisation options are important, as is the environmental impact—many prefer electric or hybrid vehicles. Their buying journey is often digital-first, favouring online research, virtual showrooms, and flexible ownership models like subscriptions or car-sharing. 
In contrast, traditional family car buyers prioritise practicality, safety, and long-term value. Their focus is on features like crash-test ratings, child safety systems, and spacious interiors that accommodate family needs. Reliability, fuel efficiency, and low maintenance costs are key, as families often plan to keep their vehicles for many years. The buying process typically involves in-person dealership visits and consensus decision-making among family members. 
Overall, younger buyers are more lifestyle- and tech-oriented, while family buyers are driven by functionality and dependability. These contrasting preferences influence not only the types of vehicles each group chooses but also how they approach the car-buying experience. Understanding these differences helps automakers and dealers tailor their offerings and marketing strategies to meet the unique needs of each segment.

 


Q6. Which types of players are setting the pace in terms of product innovation, brand strength, and customer engagement in India? 


In India’s automotive industry, Tata Motors, Mahindra & Mahindra, and Maruti Suzuki are leading in product innovation, brand strength, and customer engagement. Tata Motors stands out for its electric vehicle (EV) advancements, including models like the Nexon EV and Punch EV, and its investment in autonomous technologies. Mahindra is innovating with its Born Electric platform and futuristic SUV designs, while Hyundai India contributes with ADAS features and expanding EV offerings. 
Maruti Suzuki remains India’s most trusted brand, known for affordability, reliability, and a vast service network. Tata Motors has elevated its brand image through bold design, safety-first engineering, and EV leadership. Mahindra’s rugged appeal and iconic models like the Thar and Scorpio reinforce its strong brand presence across urban and rural markets. 
Customer engagement is driven by immersive digital experiences and community-building efforts. Tata Motors uses AR/VR showrooms and personalised service apps, while Mahindra hosts experiential events and maintains a vibrant social media presence. Hyundai India focuses on tech-enabled engagement through connected car apps and proactive service tools. 
Together, these companies are reshaping India’s automotive landscape by blending innovation with trust and customer-centric strategies, positioning themselves as industry pacesetters in 2025. 

 


Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management? 


As an investor evaluating Indian automotive companies, a key question to senior management would be: “How are you aligning product and supply chain strategies to stay competitive in India’s evolving EV and mobility ecosystem, while balancing affordability, sustainability, and scalability?” This question probes their readiness for the electric vehicle transition, including investments in battery technology, charging infrastructure, and autonomous platforms. It also assesses their ability to manage supply chain challenges such as semiconductor shortages and raw material dependencies through localisation and strategic sourcing. 
Affordability is critical in India’s price-sensitive market, so investors need clarity on how companies plan to deliver innovation without alienating mass-market consumers. Scalability is equally important—whether through expanding manufacturing capacity, dealer networks, or digital platforms for customer acquisition and retention. The question also tests leadership’s vision for rural versus urban market penetration, and their approach to balancing premium features with cost-effective offerings. 
Ultimately, this inquiry forces management to articulate a cohesive strategy that integrates innovation, operational resilience, and customer-centric growth. It helps investors gauge long-term value creation, competitive positioning, and the company’s ability to adapt to regulatory shifts and consumer expectations in one of the world’s fastest-growing automotive markets. 


 


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